The World Council of Credit Unions (Woccu) has met with policymakers in New Zealand to discuss what reforms are needed to improve and strengthen the country’s credit union sector.
During his visit, Woccu’s senior vice president of international advocacy and general counsel Andrew Price engaged with Andrew Bayly, New Zealand’s minister of commerce, and key officials from the Reserve Bank of New Zealand (RBNZ), the country’s central bank.
In 2023 New Zealand passed the Deposit Takers Bill which brings all deposit takers (such as banks, credit unions, building societies and finance companies) under a single regulatory framework.
“I hope to bring the international perspective of credit unions to prudential regulators here to show the success that properly tailored regulations play in allowing the credit union member-owned co-operative model to reach more underserved communities,” said Price.
New Zealand is home to five credit unions serving approximately 150,000 members, with NZ$1.1bn (£535m) in assets. One of these is First Credit Union, which offers personal loans, savings accounts, mortgages and home loans, term investments, insurance and everyday bank accounts. Dating back to July 1955, First Credit Union is the first credit union to have been set up in the country.
“Regulators in New Zealand often take rules designed for banks and apply them to credit unions without consideration of our unique model. This often prevents us from maximising our service to our members and our communities,” said Simon Scott, CEO of First Credit Union.
Regulators are currently considering a range of issues that might impact credit unions in New Zealand, including the application of Basel Capital standards, International Financial Reporting Standards 9 (IFRS 9)-based expected credit loss accounting measures and the addition of deposit insurance to the system.
“Proportional application of these standards could not only increase safety and soundness but also release the potential of credit unions to increase financial inclusion and posture them as economic drivers for local communities,” said Price, who also met with the Financial Services Federation, which represents other non-banking financial institutions in New Zealand.