Regulation of Credit Union

Hi,
I understand that my Credit Union is, apparently, currently functioning outside its rules of governance. It is my understanding that Credir Unions are required to adhere to specific regulatory standards and these standards are enforced by a Regulator from the Central Bank of Ireland. However, it would appear that these regulations are not being properly enforced.
I am trying to understand why this apparent ignoring of the rules appears to be condoned by the regulator.
The Credit Union appears not to be adhering to the required board numbers as laid down by statute, and It would appear to have been going on for some time.
This lack of oversight, failure to enforce compliance, inaction etc. would appear to indicate that it's acceptable to ignore the rules! If this is the case how does the regulator justify the situation? Should I be concerned about this apparent indifference? What other matters are being overlooked?
I would appreciate clarification from anyone with knowledge of the subject.
Also, how does anyone obtain
• An explanation for the apparent lack of enforcement in this matter.
• What actions the Regulator has taken, or plans to take, to address the issue.
• Information on how concerned stakeholders can escalate complaints if necessary.
I would appreciate any guidance on the matter.

I’d write to the Board of the credit union and ask them these questions and specifically cross refer to the specific sections of the the governanace handbook.
Then if you don’t get a satisfactory reply try

My understanding which maybe wrong is that the rules have credit unions needing as many broad members as a large commercial bank. I have 12 board members in my head as the requirement.
This led to ridiculous situations were small credit unions had everyone and anyone involved with the union on the board. My wife used to help with a bit of paperwork once a month in the local credit union. She ended up on the board to make up the numbers. Attending meetings in the Central Bank etc without a clue or any input to the running of the place.

It’s not that specific, between 7 and 11 it seems. And in recent years there have been many amalgamations so there aren’t so many small ones any more.

They hold others peoples money and should be subject to the same requirements as a bank. When credit unions fail it hits a community.

Ronaldo Barbi said:

The Credit Union appears not to be adhering to the required board numbers as laid down by statute, and It would appear to have been going on for some time.

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The Central Bank would have a risk based system and I would imagine that if Barbi Credit Union has 8 members instead of the 9 required in its rules, then the CB would not be overly exercised. They would be far more interested in the qualifications of the 8 board members than the absolute number.

If the legal minimum is 7 and they have only two board members, then the Central Bank would be concerned and would take action.


As Annie suggested, you should write to the Chair and point out nicely that they seem to be in breach of their own rules and ask how they intend to comply with them.

Do you attend the AGM? It's a good opportunity to raise such issues.

And you can notify the Central Bank.

Doesn't every credit union have some sort of oversight board? ( I checked with my own Capital Credit Union and I can't find any board information on the website.) You should contact them.

You could also notify the auditors that the board is not constituted in accordance with the rules.

Wrong CU

Annieindublin said:

Worth attending the AGM to see what’s going on if you have concerns.

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Hi Annie

I just gave Capital as an example. They should have their board information on their website but I am not concerned enough to attend an AGM to raise it. I just mentioned it in passing.

Brendan

Their board information for Capital is on their website.

The OP should start off by checking the website and if it’s not available write to the chair and ask for the information and also ask why it isn’t published. Afaik they are required to inform all members etc via AGM papers.

I know capital do, the AGM pack is quite substantial.

And I meant the OP should attend the AGM and ask, however I imagine that’s done now for the year and if there are issues a year is too long to wait and see.

Annieindublin said:

Their board information for Capital is on their website.

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I assumed it would be but could not find it. Can you provide a link. Is there also a Supervisory Board or something like that?

lol

Wrong CU… same name different county

Apologies

The details are all in the annual report, which is available on the website. They have 9 directors, 50k members. It doesn’t say, and I personally think it should, how long each of them have served.

Ronaldo Barbi said:

If this is the case how does the regulator justify the situation? Should I be concerned about this apparent indifference?

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Maybe because it's a fairly trivial issue in the grand scheme of things. Why should the regulator care too much if a board has 8 rather than 9 members for a period? The indifference is probably because it has little to no impact on the governance of the CU. They are volunteer boards after all, so there will be times where casual vacanies arise and they remain unfilled for a time.

Has something happened as a result of this issue?

Do you know why they were down a member (or more?), if someone dies it might take a while to replace them…

If the OP asks too many questions they may off them a place on the Board. Then they can spend their evening in long meetings unpaid after working a full day.

Hi,
Thanks to everyone for your advice, which is most welcome.
I should clarify that the Credit Union in question is not a small CU, quite the opposite, in fact! Unfortunately I did not attend the AGM due to holidays but have spoken to a few people who said it was "a lively affair"! They also felt it was "packed" with staff and family/friends of board and management. Also a number of (unknown) online attendees who asked no questions and appeared to vote in block to support the board. The board apparently had invited a solicitor to attend but failed to advise members of this fact until pressed on the matter.
I'm also led to believe the Central Bank have been "engaged" with the CU over the last few months in relation to governance. No mention of this in the annual Report, so it may not be the case.
Regarding the Oversight committee, my understanding is that two full oversight committees along with 5/6 Directors have all resigned of late, leaving a shortfall of almost 30%. I fear they may well attempt to co-opt a "chosen few" as opposed to holding elections. Surely this cannot be legal?
I understand that from time to time vacancies will arise, but why have rules if they are not going to be enforced. Isn't this where we went wrong with Anglo?
Maybe I'm turning into a conspiracy theorist, but it all does appear more than a bit odd

Ronaldo Barbi said:

"a lively affair", "packed", "engaged", "chosen few", but it all does appear more than a bit odd

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It certainly does sound "odd"...

Ronaldo Barbi said:

Maybe I'm turning into a conspiracy theorist

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Indeed. This all does sound a bit conspiracy theorist-y (especially the reference to Anglo, it's just one CU!). I mean a credit union is governed by volunteers and staff are generally members, so it would seem logical that the AGMs - which are typically very poorly attended - are "packed" with them and their family/friends - what the issue is with this is beyond me? Also, you mention "(unknown) online atendees who asked no questions and appeared to vote in block to support the board" - unknown to whom? Are the online attendees required to identify themselves to the other attendees or something? Did each person in physical attendance stand up and shout their name to make themselves known? Also, how does one know how these online attendees voted? Also, they supported the board in what votes exactly?

You're being very vague. "I'm lead to believe", "my understanding is"..... Maybe you're right, but you don't seem to have any evidence other than hearsay. If 2 oversight committees & 5 or 6 directors resigned there would be a much bigger shortfall than 30% since the maximum size of a board is 11. Also, if all the oversight commitee resigned they'd have to have had a Special General Meeting. In terms of co-opting people, they would be legally required to co-opt new directors/volunteers until the next AGM anyway, there is no legal basis for them holding elections outside of an AGM/SGM. By definition anyone appointed will be part of the "chosen few", as you frame it.

24601 said:

This all does sound a bit conspiracy theorist-y

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Not really. In my experience the people who run credit unions think that they have a divine right to rule. They are right and anyone who questions them is an enemy.

If the board felt that they were going to be under attack at the AGM, I am sure they would try to get friendly members to attend.

Ronaldo Barbi said:

my understanding is that two full oversight committees along with 5/6 Directors have all resigned of late, leaving a shortfall of almost 30%. I fear they may well attempt to co-opt a "chosen few" as opposed to holding elections. Surely this cannot be legal?

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As a member, you should bring this to the attention of the Central Bank - even if it's only a suspicion.

Hi,
Apologies for the delay in responding but I needed to seek clarification on some points.
I will attempt to address the issues raised as best I can:

A. My reference to Anglo pertained to the rules and role of the regulator. Nothing to do with size, or for that matter balance sheets.
B. I just wonder whether the staff in attendance on the night were being remunerated for being there. I presume the laywer (non-member) wasn't acting "pro bono".
Btw, anyone know the protocol for inviting non-members to an AGM?
C. Any online meetings I have attended (not that many), those in attendance have always been identified.
D. It is my experience that people speaking at meetings usually identify themselves. They don't necessarily shout out their name, but tend give it for the record.
E. I was informed that the online vote, in the main, supported the boards position. The meeting was advised of how they voted. True, that is "hearsay".
F. I consider it part of the (paid) Regulator's role to ascertain proof, where necessary. In the meantime I will continue to maintain a "passing interest."
G. There has been two SGM's to elect two oversight committees, both held "on line."
H. There were some co-options between AGM's. Following the recent AGM and elections the board now number 8 out of 11 and oversight 3 out of 5. Overall shortage of 5 (31.25%).
I. Co-option of directors is meant for "casual vacancies " and cannot be used to fill a "normal vacancy".
I hope this goes someway to explaining my concerns. Thanks again for all your comments.