The much awaited consultation document is not yet available. Here is a sneek preview of some of the thinking as provided by Sammy Amissah of HMT.
At the “Co-operating with Change” Consultation Conference organised by Co-operativesUK and ABCUL at New Century House on 5th June 2007, Sammy Amissah from the Treasury revealed that substantial progress had been made towards the production of the consultation paper but pointed out that work on the Financial Mutuals Private Members’ Bill and other issues had delayed matters.
He suggested the following broad areas might be looked at and here are some notes on his comments:
Future Direction of the Sector :-
Legal Barriers to financial services operations by industrial and provident societies (I & P’s) such as prohibition on banking by societies with withdrawable share capital; issues around capital adequacy and banking regulation in that context; comparison with Rabobank (NL) and Credit Agricole (France). Oudated I & P name.
£20K capital limit, remove or change? Regulatory implications of this especially if withdrawable share capital used; non-user investor members – clarifying this possibility which FSA have already accepted under present law; protection of the use of the word “co-operative”.
Need for parity with companies but possibility of extra costs to societies to allow FSA to finance upgrade to electronic filing and searching of I & P register.
Application of Company Directors Disqualification Act 1986 to I & P directors.
Legal rule to allow directors of any society to be removed by ordinary resolution of the society’s members regardless of anything to contrary in rules – as is the cae for company directors under section 303 CA 1985.
Whether duties of I & P directors need to be codified as will happen with company directors when Companies Act 2006 is in force.
Issues about training for directors of societies – a concern members have raised with the Treasury, apparently.
Change of Name to “Community Banks”?
Liberalisation of Common Bond and balancing this with increased regulation as per Banking rules on e.g. capital adequacy
Non-Qualifying Member Rules – adjustment to allow person to stay a credit union member even if no longer in common bond.
Allow corporate membership of credit unions? Community organisations as members? Making deposits?
Electronic Communications ( as with I & P’s generally)