EU officials discuss regulatory requirements for Ukrainian credit unions

The country’s credit unions are too small to meet EU requirements and could be forced to close if they are not made exempt, say campaigners

Ukrainian credit unions have met EU banking and finance officials in Brussels to raise their concerns about regulatory requirements for the sector.

The meeting was also attended by Woccu’s Credit for Agriculture Producers (CAP) Project team and an officer from the government agency in charge of negotiating the legal framework for Ukrainian credit unions under a EU-Ukraine Association Agreement.

Under the agreement, Ukraine commits to economic, judicial, and financial reforms to converge its policies and legislation to those of the European Union.

During their discussion with the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA), Ukrainian credit unions representatives looked at issues such as expedited exemption procedures and provision guarantees for credit union members’ deposits.

They also looked at the transition of Ukraine’s credit union regulatory authority from the National Commission for the State Regulation of Financial Markets to the National Bank of Ukraine, which is due to take place next July.

Over the past three years the CAP Project has been campaigning to exempt Ukrainian credit unions from CRD IV capital requirements – a set of prudential rules for the EU banking sector.

DG FISMA agreed to exempt Ukrainian credit unions from CRD IV capital requirements in September.

Credit unions representatives also met with the chair of the EU Credit Union Parliamentary Interest Group, which is comprised of MEPs from countries with strong credit union constituencies. The group expressed support for Ukrainian reforms, security and economic growth.

“Such meetings are important as the European Parliament must still vote to approve any exemptions to the EU directives for Ukraine so its credit unions can grow and strengthen,” said Ewa Sierzynska, chief of Party for the CAP Project.

“They are simply too small to meet the EU requirements. Lack of the exemption would lead to stagnation and closure of credit unions as we have seen in other European countries where such exemptions were not granted.”

CAP is a four-year project (2016-2020) funded by USAID and implemented by the World Council of Credit Unions (Woccu). The project focuses on improving the legal status and regulatory framework for credit unions in Ukraine, strengthen the two credit union national associations and build the capacity of credit unions to better serve their members and meet credit needs.