Credit Union and Co-operation with Overseas Regulators Act 2012

Credit Union and Co-operation with Overseas Regulators Act 2012 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.ie) Translations (Houses of the Oireachtas) Government Publications for Sale EU Law (EUR-Lex) FAQ Disclaimer Feedback Helpdesk Search Baile Reachtaíocht Achtanna an Oireachtais Ionstraimí Reachtúla Reachtaíocht Réamh-1922 Bunreacht Acmhainní Seachtracha Billí (Tithe an Oireachtais) Iris Oifigiúil Achtanna Athbhreithnithe (CAD) (An Coimisiún um Athchóiriú an Dlí) Liosta Rangaithe Reachtaíochta Aistriúcháin (achtanna.ie) Aistriúcháin (Tithe an Oireachtais) Foilseacháin Rialtais ar Díol Dlí AE (EUR-Lex) CCanna (Ceisteanna Coitianta) Séanadh Aiseolas Deasc chabhrach Cuardach TitleTeideal Year(s) or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 2012 Credit Union and Co-operation with Overseas Regulators Act 2012 Credit Union and Co-operation with Overseas Regulators Act 2012 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Revised Act Acht Athbh… Open PDFOscail PDF Print Full ActPriontáil an tAcht Iomlán Number 40 of 2012 CREDIT UNION AND CO-OPERATION WITH OVERSEAS REGULATORS ACT 2012 ARRANGEMENT OF SECTIONS PART 1 Preliminary and General Section 1. Short title, construction and collective citation. 2. Commencement. 3. Definition. 4. Savers for regulatory actions of Bank. 5. Expenses. PART 2 Amendments to Credit Union Act 1997 and Consequential Amendments, etc. 6. Amendment of section 2 (Interpretation) of Principal Act. 7. Supplemental provisions relating to registration, etc., under section 6 of Principal Act. 8. Savings. 9. Protection of members’ savings. 10. Borrowing. 11. Lending. 12. Investments. 13. Reserves. 14. Appeal against certain decisions of Bank. 15. Board of directors. 16. Operation of board of directors. 17. Functions of board of directors. 18. Chair of board of directors, etc. 19. Board committees. 20. Nomination committee. 21. Manager of credit union. 22. Credit officer and credit control officer. 23. Directors: suspension and removal by board oversight committee. 24. General governance requirements. 25. Conflicts of interest. 26. Additional requirements for credit unions. 27. Board oversight committee. 28. Special resolutions. 29. Power of Bank to make regulations. 30. Liquidity and stress testing, etc. 31. Bank’s power to require appointment of additional director of credit union. 32. Removal of auditor of credit union by Bank. 33. General regulations by Bank. 34. Certain enactments not to apply to credit unions, etc. 35. Miscellaneous and consequential amendments to Principal Act. 36. Consequential amendments of the Central Bank Act 1942. 37. Amendment of Schedule 2 to Central Bank Act 1942. 38. Revocation of statutory instruments. PART 3 Restructuring Preliminary and restructuring generally 39. Interpretation (Part 3). 40. Independence of Bank and its Governor not affected (Part 3). 41. Minister to have regard to European Union law (Part 3). Credit Union Restructuring Board 42. Establishment of Credit Union Restructuring Board. 43. Cessation of effect of this Part. 44. Restructuring functions of ReBo. 45. Restructuring of credit unions. 46. Guidelines and directions. 47. ReBo levy. 48. Collection of ReBo levy and amendment of section 61H of the Central Bank Act 1942. 49. Membership of Board of ReBo, etc. 50. Non-disclosure of information. 51. Reports to Minister. 52. Chief executive officer of ReBo. 53. Staff of ReBo. 54. Accounts and audit. 55. Contracted service providers. 56. Disclosure of information. Credit Union Fund and Credit Union Levy 57. Credit Union Fund. 58. Keeping and audit of accounts of Credit Union Fund, etc. 59. Credit union levy. 60. Arrangements for collection of credit union levies. PART 4 Stabilisation 61. Interpretation (Part 4). 62. Independence of Bank and its Governor not affected (Part 4). 63. Minister and Bank to have regard to European Union law (Part 4). 64. Funding for stabilisation support. 65. Provision of stabilisation support. 66. Stabilisation Committee. 67. Expenses of Bank under Part 4. PART 5 Miscellaneous Amendments relating to Central Bank Acts 1942 to 2011 68. Amendments to Central Bank Act 1942. 69. Amendment to Central Bank Reform Act 2010. 70. Amendments, repeals, revocations, savings and transitional provisions (Part 5). SCHEDULE 1 Miscellaneous and Consequential Amendments to Credit Union Act 1997 SCHEDULE 2 Amendments to Certain Acts and Statutory Instruments PART 1 Amendments to Certain Acts PART 2 Amendments to Certain Statutory Instruments SCHEDULE 3 Amendments of Central Bank Acts PART 1 Amendments of Central Bank Act 1971 PART 2 Amendments of Central Bank Act 1997 SCHEDULE 4 Amendments of Certain Other Acts PART 1 Amendments of Building Societies Act 1989 PART 2 Amendment of Trustee Savings Banks Act 1989 PART 3 Amendment of Investment Limited Partnerships Act 1994 PART 4 Amendments of Consumer Credit Act 1995 PART 5 Amendments of Investment Intermediaries Act 1995 PART 6 Amendments of Credit Union Act 1997 PART 7 Amendments of Investor Compensation Act 1998 PART 8 Amendment of Asset Covered Securities Act 2001 SCHEDULE 5 Amendments to Certain Statutory Instruments PART 1 Amendments of European Communities (Distance Marketing of Consumer Financial Services) Regulations 2004 PART 2 Amendment of European Communities (Insurance Mediation) Regulations 2005 PART 3 Amendment of European Communities (Reinsurance) Regulations 2006 PART 4 Amendments of European Communities (Markets in Financial Instruments) Regulations 2007 PART 5 Amendments of European Communities (Insurance and Reinsurance Groups Supplementary Supervision) Regulations 2007 PART 6 Amendments of European Communities (Credit Institutions) (Consolidated Supervision) Regulations 2009 PART 7 Amendment of European Communities (Cross Border Payments) Regulations 2010 Acts Referred to Asset Covered Securities Act 2001 2001, No. 47 Building Societies Act 1989 1989, No. 17 Central Bank Act 1942 1942, No. 22 Central Bank Act 1971 1971, No. 24 Central Bank Act 1989 1989, No. 18 Central Bank Act 1997 1997, No. 8 Central Bank Acts 1942 to 2011 Central Bank and Credit Institutions (Resolution) Act 2011 2011, No. 27 Central Bank Reform Act 2010 2010, No. 23 Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 2010, No. 24 Companies Act 1963 1963, No. 33 Companies Act 1990 1990, No. 33 Consumer Credit Act 1995 1995, No. 24 Consumer Protection Act 2007 2007, No. 19 Credit Institutions (Stabilisation) Act 2010 2010, No. 36 Credit Union Act 1966 1966, No. 19 Credit Union Act 1997 1997, No. 15 Credit Union Acts 1997 and 2001 Data Protection Acts 1988 and 2003 European Communities Act 1972 1972, No. 27 Financial Emergency Measures in the Public Interest Act 2009 2009, No. 5 Industrial and Provident Societies Acts 1893 to 1978 Insurance (No. 2) Act 1983 1983, No. 29 Insurance Act 1989 1989, No. 3 Investment Intermediaries Act 1995 1995, No. 11 Investment Limited Partnerships Act 1994 1994, No. 24 Investor Compensation Act 1998 1998, No. 37 Public Service Management (Recruitment and Appointments) Act 2004 2004, No. 33 Taxes Consolidation Act 1997 1997, No. 39 Trustee Savings Banks Act 1989 1989, No. 21 Number 40 of 2012 CREDIT UNION AND CO-OPERATION WITH OVERSEAS REGULATORS ACT 2012 AN ACT TO AMEND CERTAIN PROVISIONS OF THECREDIT UNION ACTS 1997 AND 2001, IN PARTICULAR, TO AMEND THE PRUDENTIAL REQUIREMENTS FOR CREDIT UNIONS, TO CHANGE THE GOVERNANCE REQUIREMENTS FOR CREDIT UNIONS BY REMOVING CERTAIN MANAGEMENT FUNCTIONS FROM BOARDS OF DIRECTORS OF CREDIT UNIONS AND PROVIDING FOR A SEPARATE MANAGEMENT STRUCTURE AND TO IMPROVE THE OVERSIGHT AND GENERAL POLICY FUNCTIONS OF SUCH BOARDS OF DIRECTORS; TO PROVIDE FOR THE RESTRUCTURING OF CREDIT UNIONS AND FOR STABILISATION SUPPORT TO CREDIT UNIONS, TO PROVIDE FOR A FUND TO BE KNOWN AS THE CREDIT UNION FUND FOR THE PURPOSES OF SUCH RESTRUCTURING AND STABILISATION AND TO PROVIDE FOR LEVIES IN RESPECT OF THAT FUND; TO PROVIDE FOR MISCELLANEOUS MATTERS RELATING TO CREDIT UNIONS; TO AMEND THE CENTRAL BANK ACTS 1942 TO 2011, TO PROVIDE FOR CO-OPERATION BETWEEN THE CENTRAL BANK OF IRELAND AND OVERSEAS REGULATORS AND TO PROVIDE FOR THE APPOINTMENT OF AUTHORISED OFFICERS BY THE CENTRAL BANK OF IRELAND; AND TO PROVIDE FOR MATTERS RELATED TO THE FOREGOING. [19th December, 2012] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS: PART 1 Preliminary and General Short title, construction and collective citation. 1.— (1) This Act may be cited as the Credit Union and Co-operation with Overseas Regulators Act 2012. (2) The Credit Union Acts 1997 and 2001 and this Act (other than sections 36 , 37 , 48 (2) and 56(3), Part 5 and Schedules 2 to 5) may be cited together as the Credit Union Acts 1997 to 2012 and shall be construed together. (3) The Central Bank Acts 1942 to 2011, sections 36 , 37 , 48 (2) and 56(3), Part 5 (in so far as it amends any of those Acts), and Schedules 2 and 3 (in so far as they amend any of those Acts) may be cited together as the Central Bank Acts 1942 to 2012. Commencement. 2.— (1) This Act comes into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or provisions. (2) Notwithstanding the commencement of the Principal Act, the provisions of section 3(2) of the Principal Act relating to an order under section 1(2) of that Act apply to an order made under this section. Definition. 3.— In this Act “Principal Act” means the Credit Union Act 1997 . Savers for regulatory actions of Bank. 4.— (1) A regulatory action taken by the Bank under a provision being amended, repealed or revoked by this Act on or before the commencement of such amendment, repeal or revocation, continues to have effect according to its terms. The Bank may enforce such a regulatory action. (2) Notwithstanding anything in the rules of a credit union, the board of directors may, by resolution passed during the transitional period, make such amendments of the rules of the credit union as may be consequential on the provisions of this Act. (3) For the purposes of subsection (2), the transitional period is the period of one year from the commencement of this section. (4) Notwithstanding anything in section 14(4) of the Principal Act, after the expiry of one year from the commencement of this section, the Bank shall not be required to register any amendment of a credit union’s rules unless such consequential amendments of the registered rules as are mentioned in subsection (2) either— (a) have been made before the Bank receives the amendment; or (b) are to be effected by the amendment. (5) In subsection (1) “regulatory action” includes any direction, order, requirement, sanction, condition, appointment or request (however described) of a regulatory nature made, given or imposed by the Bank. Expenses. 5.— The expenses incurred by the Minister in the administration of this Act shall, to such extent as may be sanctioned by the Minister for Public Expenditure and Reform, be paid out of moneys provided by the Oireachtas. PART 2 Amendments to Credit Union Act 1997 and Consequential Amendments, etc. Amendment of section 2 (Interpretation) of Principal Act. 6.— The Principal Act is amended by substituting the following for subsection (1) of section 2: “(1) In the Credit Union Acts 1997 to 2012— ‘Act of 1966’ means the Credit Union Act 1966 ; ‘Advisory Committee’ means the committee established under section 180; ‘amendment’, in relation to the rules of a credit union, includes a new rule, and a resolution rescinding a rule, of the credit union; ‘annual accounts’ has the meaning given by section 111(6); ‘annual general meeting’ has the meaning given by section 78(1); ‘annual return’ means the annual return which a credit union is required by section 124 to send to the Bank; ‘Bank’ means the Central Bank of Ireland; ‘board of directors’ means the body which has general control, direction and management of a credit union and to which section 53 relates; ‘board oversight committee’ has the meaning given by section 76L; ‘books and documents’ includes accounts and records made in any manner, and ‘books or documents’ shall be construed accordingly; ‘business continuity’ and ‘business continuity plan’ have the meanings given to them, respectively, by section 76I; ‘chair’ has the meaning given by section 55A(2); ‘civil partner’ has the same meaning as it has in the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 ; ‘cohabitant’ has the same meaning as it has in the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 ; ‘common bond’ means a common bond falling within section 6(3); ‘compliance officer’ has the meaning given by section 76D; ‘contravention’ includes failure to comply; ‘Court’ means the High Court; ‘credit institution’ means— (a) a recognised bank within the meaning of the Central Bank Acts 1942 to 2011, (b) a trustee savings bank, (c) the Post Office Savings Bank, or (d) a building society within the meaning of the Building Societies Act 1989 ; ‘credit union’ means a society registered as such under this Act, including a society deemed to be so registered by virtue of section 5(3); ‘debentures’ means any debentures, debenture stock or bonds of a credit union, whether constituting a charge on the assets of the credit union or not; ‘financial services legislation’, where applicable to credit unions acting under any authorisation from the Bank provided for by law, means— (a) the designated enactments within the meaning of section 2 of the Central Bank Act 1942 , (b) the designated statutory instruments within the meaning of section 2 of the Central Bank Act 1942 , and (c) the Central Bank Acts 1942 to 2011 together with the statutory instruments made under those Acts; ‘general meeting’ means an annual general meeting or a special general meeting; ‘internal audit charter’ has the meaning given by section 76K(2); ‘internal audit function’ has the meaning given by section 76K(1); ‘internal audit plan’ has the meaning given by section 76K(3); ‘manager’, in relation to a credit union, means the individual appointed to the role of manager of the credit union under section 63A; ‘management team’ has the meaning given by section 55(1)(i); ‘meeting’, includes, where the registered rules of a credit union so allow, a meeting of delegates appointed by members; ‘member of the family’, in relation to any person, means that person’s father, mother, grandfather, grandmother, father-in-law, mother-in-law, spouse or civil partner, cohabitant, son, daughter, grandson, granddaughter, brother, sister, half-brother, half-sister, uncle, aunt, nephew, niece, first cousin, step-son, step-daughter, step-brother, step-sister, son-in-law, daughter-in-law, brother-in-law or sister-in-law; ‘Minister’ means the Minister for Finance; ‘nomination committee’ has the meaning given by section 56B(1); ‘non-qualifying member’, in relation to a credit union, has the meaning given by section 17(4); ‘officer’, in relation to a credit union, includes— (a) the chair, the secretary or any other member of the board of directors, a member of a principal Committee, a member of the board oversight committee, risk management officer, compliance officer, credit officer or credit control officer of the credit union, (b) an employee of the credit union to whom paragraph (a) does not apply, and (c) a voluntary assistant of the credit union, but does not include an auditor appointed by the credit union in accordance with the requirements of this Act; ‘operational risk’ has the meaning given by section 76E(1); ‘organisation meeting’ has the meaning given by section 77(1); ‘pass book’ includes any type of written statement of account; ‘persons claiming through a member’ includes the executors or administrators and assignees of a member and, where nomination is allowed, the member’s nominee; ‘prescribe’ means— (a) in relation to the Minister, prescribed by regulations made by the Minister under section 182, and (b) in relation to the Bank, prescribed by regulations made by the Bank under section 182A; ‘principal Committee’, in relation to a credit union, means a credit committee, credit control committee or membership committee; ‘register’ means the register maintained under section 8(5); ‘registered’ means for the time being entered in the register and ‘registration’ shall be construed accordingly; ‘regulatory directions’ has the meaning given by section 87(3); ‘restructuring proposal’ has the meaning given by section 45 (1) of the Credit Union and Co-operation with Overseas Regulators Act 2012; ‘risk management officer’ has the meaning given by section 76C(1); ‘risk management system’ has the meaning given by section 76B(1); ‘savings’, in relation to a credit union, has the meaning given by section 27(1); ‘share’, in relation to a credit union, means each sum of one euro standing to the credit of a member of that credit union in respect of shares in the register of members required by this Act to be kept by that credit union; ‘special general meeting’ shall be construed in accordance with section 79; ‘special resolution’ means a resolution which is passed by a majority of not less than three quarters of such members of a credit union present and voting and who are for the time being entitled to vote in person at any general meeting of which notice, specifying the intention to propose the resolution, has been duly given according to the rules of the credit union; ‘strategic objectives’ has the meaning given by section 76A(1); ‘strategic plan’ has the meaning given by section 76A(1); ‘voluntary assistant’, in relation to a credit union, means a member of the credit union who, although not a remunerated employee of the credit union, is engaged in any way in the operation of the credit union.”. Supplemental provisions relating to registration, etc., under section 6 of Principal Act. 7.— The Principal Act is amended by inserting the following section after section 6: “6A.— (1) The Bank may impose such conditions, if any, as the Bank considers to be necessary to protect, with effect from registration under this Part, the interests of the members of the society seeking registration and any such conditions shall be a condition for registration as a credit union. (2) The conditions imposed by the Bank under subsection (1) may include requiring a credit union— (a) to notify the Bank of any events of such significance that could materially affect the credit union including any change to the strategic plan of the credit union; (b) to operate a more limited business model agreed with the Bank; (c) to cause to be undertaken an independent review of the credit union’s business within 12 months in order to ensure that the credit union is complying with all legal and regulatory requirements. (3) Any of the conditions of registration may be amended or revoked by the Bank if, in the opinion of the Bank— (a) the amendment or revocation is necessary to protect the interests of the credit union’s members, or (b) the conditions concerned have become spent orobsolete and should be revoked. (4) Whenever the Bank proposes to impose a condition in relation to a registration or to amend the conditions of a registration— (a) it shall notify in writing the society seeking registration under this Part or the credit union concerned, as the case may be— (i) that it intends to impose one or more than one condition in relation to the registration or to amend the existing conditions of the registration imposed under this section, as the case may be, and of its reasons for so doing, and (ii) that the society or credit union concerned, as the case may be, may, within 15 working days after the date of the giving of the notification, make representations in writing to the Bank in relation to the imposition or amendment, as the case may be, and shall specify in the notification, the condition or the amendment, as the case may be, and (b) the society or credit union concerned, as the case may be, may make such representations to the Bank within the time referred to in paragraph (a)(ii). (5) Before deciding to impose conditions of registration, or an amendment of conditions of the registration, under this section, as the case may be, the Bank shall consider any representations duly made to it under subsection (4)(b) and, after so considering, the Bank may— (a) decide to impose the conditions of registration, or the amendment of the conditions of the registration, under this section, as the case may be, (b) decide to impose the conditions or amend the conditions of the registration under this section, as the case may be, that differ from those specified in the notification concerned, but only if the difference results in the conditions concerned being no more onerous than would be the case had the Bank decided to impose the conditions or amend the conditions of the registration, as the case may be, in accordance with the notification concerned, or (c) without prejudice to subsections (1) to (3), decide not to impose the conditions or not to amend the conditions of the registration.”. Savings. 8.— The Principal Act is amended by substituting the following for section 27: “27.— (1) A credit union may raise funds to be used for its objects— (a) by the issue to its members of shares in the credit union (which may be withdrawable or non-withdrawable), and (b) by the acceptance of money on deposit from a member, and the cumulative amount of such shares in, and money on deposit (if any) with, the credit union is referred to in this Act as ‘savings’. (2) For the adequate protection of the savings of members of credit unions the Bank may prescribe requirements and limits for savings, including— (a) the maximum amount of savings (expressed as a monetary amount or as a percentage of some monetary amount or determinable monetary amount) or category of savings a credit union member may hold, (b) the ratio of total deposits from members that may be held by a credit union to total shares issued to members, and (c) any other requirement or limit which the Bank considers necessary to prescribe. (3) In prescribing matters for the purposes of this section, the Bank shall have regard to the need to ensure that the requirements imposed by the regulations made by it are effective and proportionate having regard to the nature, scale and complexity of credit unions, or the category or categories of credit unions, to which the regulations will apply.”. Protection of members’ savings. 9.— The Principal Act is amended by inserting the following after section 27 (inserted by section 8 ): “27A.— (1) In addition to its reporting functions under the Credit Union Acts 1997 to 2012 and complying with any matter prescribed under those Acts, a credit union shall maintain appropriate oversight, policies, procedures, processes, practices, systems, controls, skills, expertise and reporting arrangements to ensure the protection of members’ savings and that it complies with requirements imposed under the financial services legislation. (2) Without prejudice to the generality of subsection (1), the Bank may make regulations prescribing— (a) certain oversight, policies, procedures, processes, practices, systems, controls, skills, expertise and reporting arrangements which the credit union is required to maintain where the Bank considers this is appropriate in the interest of protecting members’ savings or otherwise appropriate to ensure compliance with the requirements imposed under financial services legislation; (b) requirements in relation to the oversight, policies, procedures, processes, practices, systems, controls, skills, expertise and reporting arrangements required to be maintained under this section.”. Borrowing. 10.— The Principal Act is amended by substituting the following for section 33: “33.— (1) For the purpose of its objects as referred to in section 6 a credit union may borrow money, on security or otherwise, and may issue debentures accordingly. (2) For the adequate protection of the savings of members of credit unions, the Bank may prescribe— (a) the maximum amount of money a credit union may borrow at any one time which may be expressed as a percentage of the aggregate of shares balance and the deposits balance of the credit union, and (b) the notice to be given to the Bank by a credit union in specified circumstances where the credit union proposes to borrow certain amounts of money (expressed as a monetary amount or as a percentage of some monetary amount or determinable monetary amount) in respect of those circumstances. (3) Where the Bank considers it is necessary in the interests of the proper regulation of a credit union or credit unions generally, or the protection of members’ savings, it may do either or both of the following: (a) permit a credit union to borrow moneys in excess of the amount prescribed in accordance with subsection (2); (b) waive any notice requirement prescribed in accordance with subsection (2). (4) A person dealing with a credit union shall not be obliged to be satisfied or to enquire into whether the limit imposed on the credit union by virtue of subsection (2) (or such limit as may be duly affected under subsection (3)) has been or is being observed; but if a person who lends money to a credit union or takes security in connection with such a loan has, at the time the loan is made or the security is taken, actual notice of the fact that that limit has been or is thereby exceeded, the credit union’s debt or, as the case may be, the security shall be unenforceable. (5) Subject to subsection (4), a transaction with a credit union shall not be invalid or ineffectual by reason of the fact that the limit on borrowing prescribed by the Bank under subsection (2) (or such limit as may be duly affected under subsection (3)) has been or is by the transaction exceeded. (6) In prescribing matters for the purposes of this section, the Bank shall have regard to the need to ensure that the requirements imposed by the regulations made by it are effective and proportionate having regard to the nature, scale and complexity of credit unions, or the category or categories of credit unions, to which the regulations will apply.”. Lending. 11.— (1) The Principal Act is amended by substituting the following for section 35: “35.— (1) (a) In this section ‘large exposure’, in relation to loans of a credit union to a borrower or a group of borrowers who are connected, means the total exposure (including contingent liabilities) of the credit union where the total exposure to such borrower or group of borrowers would be greater than an amount (whether expressed as a monetary amount or as a percentage of some monetary amount or determinable monetary amount) prescribed by the Bank. (b) For the purposes of this subsection— ‘control’ has the meaning assigned to it by section 432 of the Taxes Consolidation Act 1997 and the other relevant provisions of Part 13 of that Act; ‘group of borrowers who are connected’ means 2 or more persons— (i) who, unless it is shown otherwise, constitute a single risk because one of them, directly or indirectly, has control over the other person or persons (not being individuals); or (ii) between whom there is no relationship of control as set out in subparagraph (i), but who are to be regarded as constituting a single risk because they are so interconnected that, if one of them were to experience financial problems, the other person or some or all of the other persons would be likely to encounter repayment difficulties. (2) A credit union may make a loan to a member for such purpose as the credit union considers appropriate, upon such security (or without security) and terms as the rules of the credit union may provide. The ability of the loan applicant to repay shall be the primary consideration in the underwriting process of the credit union. (3) A credit union shall manage and control lending to ensure the making of loans does not involve undue risk to members’ savings taking into account the nature, scale, complexity and risk profile of the credit union. (4) Every application to a credit union for a loan shall be in writing and shall state the purpose for which the loan is required and the security (if any) offered for it. (5) A credit union shall not accept from an officer of the credit union a guarantee for a loan to another member unless that other member is the officer’s spouse or civil partner, child or parent. (6) Where the rules of a credit union so provide, the credit union may determine in accordance with those rules the total, including percentage, amount of loans (if any) that it may grant to non-qualifying members. (7) In relation to loans to which this section relates and for the adequate protection of the savings of members of credit unions, the Bank may prescribe one or more of the following: (a) the classes of lending a credit union may engage in whether by reference to any common characteristic of the credit unions or loans concerned, or otherwise; (b) the limits on the total, including percentage, amount of loans generally, or unsecured loans or class or classes of loans, that may be lent by credit unions, having regard to period or periods of time for which loans concerned are made; (c) the matters relating to large exposures of credit unions and limits relating to such exposures; (d) the limits on the concentration of lending, including concentration limits on loan classes, including concentration limits on loans to a member of a credit union; (e) any other limit that the Bank considers appropriate. (8) For the adequate protection of the savings of members of credit unions the Bank may prescribe such other requirements as it considers necessary in relation to any one or more of the following matters: (a) the lending practices of credit unions, including— (i) loan application assessments, (ii) the making of provision for specified matters, (iii) reviews to assess the adequacy of provisions, (iv) maintaining policies for the holding of provisions, for credit and for credit control, (v) the types of security that may be accepted; (b) reporting loans to the Bank; (c) the holding by credit unions of provisions, reserves or capital against loans or specified classes or types of loans. (9) In prescribing matters for the purposes of this section, the Bank shall have regard to the need to ensure that the requirements imposed by the regulations made by it are effective and proportionate having regard to the nature, scale and complexity of credit unions, or the category or categories of credit unions, to which the regulations will apply. (10) A credit union shall ensure that it has appropriate processes, procedures, systems, controls and reporting arrangements to monitor compliance with the requirements of this section and any requirement imposed under this section. (11) Subject to its rules, in respect of a loan, a credit union may accept, in addition to other forms of security— (a) a guarantee by a member, or (b) a pledge by a member of shares in or deposits with the credit union, and, where such a guarantee or pledge is accepted, it shall be deemed to be a security for the loan.”. (2) Where immediately before the commencement of this section, either generally or in respect of a category or categories of credit unions— (a) there is a subsisting approval given by the Bank under subsection (2) of section 35 of the Principal Act in respect of the limits set out in that subsection, (b) there is a subsisting approval given by the Bank under subsection (4) of section 35 of the Principal Act in respect of a larger percentage than that to which the subsection relates, (c) there is a subsisting order made by the Minister under subsection (6) of section 35 of the Principal Act in respect of financial (including percentage) limits, or (d) there are requirements in place for the purposes of section 35 of the Principal Act in respect of credit unions, then that approval or order or those requirements shall continue to have effect to the extent that the matters to which such approval, order or requirements relate have not been dealt with by being prescribed by the Bank under that section of the Principal Act as amended by subsection (1). Investments. 12.— The Principal Act is amended by substituting the following for section 43: “43.— (1) A credit union shall manage its investments to ensure that those investments do not (taking account of the nature, scale, complexity and risk profile of the credit union) involve undue risk to members’ savings and, for that purpose, before making an investment a credit union shall assess the potential impact on the credit union, including the impact on the liquidity and financial position of the credit union. (2) A credit union may invest any of its funds, which are surplus to its operating requirements and are not immediately required for the purposes of the credit union, in any one or more of the following: (a) the shares of, or deposits with (other than deposits to which subsection (6) relates) or loans to, another credit union as the Bank may prescribe; (b) the shares of a society registered under the Industrial and Provident Societies Acts 1893 to 1978 as the Bank may prescribe; (c) such other investments as may be prescribed for that purpose by the Bank under subsection (3). (3) For the purposes of subsection (2)(c) the Bank may prescribe investments in which a credit union may invest its funds. In prescribing matters for the purposes of subsection (2) and having regard to the need to avoid undue risk to members’ savings, the Bank may also prescribe other matters in relation to prescribed investments, including any of the following: (a) the classes of investments, including, where appropriate, any investment project of a public nature the credit union may invest in; (b) the quality of investments and quality of counterparties that the credit union may invest in; (c) the maximum, including percentage, amount (by reference to a credit union’s surplus funds to which subsection (2) relates or otherwise) of a class of investments that may be invested in; (d) the term to maturity of a class of investments; (e) the currency of a class of investments; (f) limits for investment, whether by reference to maturity, currency, counterparty, sector, instrument or otherwise; (g) any other matters that the Bank may consider necessary in the circumstances. (4) The Bank may prescribe matters for the purposes of any distribution policy to be applied by a credit union in respect of investment income. (5) In prescribing matters for the purposes of this section, the Bank shall have regard to the need to ensure that the requirements imposed by the regulations made by it are effective and proportionate having regard to the nature, scale and complexity of credit unions, or the category or categories of credit unions, to which the regulations will apply. (6) In so far as any funds of a credit union that are surplus to its operating requirements— (a) are not immediately required for the purposes of the credit union, (b) are not invested in accordance with subsection (2), or (c) are not kept in cash in the custody of officers of the credit union, those funds shall be kept by the credit union on current account with a credit institution. (7) Where any funds of a credit union are on current account with, or on loan to, an institution which ceases to be a credit institution, the credit union shall take all practicable steps to call in and realise the loan within the period of 3 months from the time when the institution so ceased or, if that is not possible, as soon after the end of that period as possible.”. Reserves. 13.— The Principal Act is amended by substituting the following for section 45: “45.— (1) In this section— ‘assets’ means such assets as the Bank may from time to time specify for the purposes of this section; ‘regulatory reserve’ means a reserve that is a realised financial reserve which is— (a) unrestricted and non-distributable, (b) identified separately in a credit union’s accounts, and (c) to be maintained by a credit union pursuant to this section; ‘regulatory reserve requirement’ means the amount required to be held in the regulatory reserve of a credit union, expressed as a percentage of the assets of a credit union and prescribed by the Bank. (2) A credit union shall maintain reserves that are adequate having regard to the nature, scale, complexity and risk profile of its business. (3) The Bank may prescribe the regulatory reserve requirement that a credit union shall maintain at a minimum and, in so prescribing, may include conditions on the application of the regulatory reserve requirement. For that purpose the Bank may also prescribe in respect of other matters related to the regulatory reserve requirement, including any of the following: (a) the application of risk weightings to assets for the purposes of calculating the regulatory reserve requirement; (b) the types and attributes of the assets or liabilities included in the calculation of the regulatory reserve requirement; (c) the requirement for initial reserves to be held by a newly-registered credit union under section 6. (4) Where requirements to which subsection (3)(c) relate have been prescribed, they shall not apply to a credit union established as a result of amalgamations of 2 or more existing credit unions. (5) A credit union shall maintain reserves, in addition to the regulatory reserve requirement prescribed under subsection (3) that— (a) it has assessed are required in respect of operational risk having regard to the nature, scale, complexity and risk profile of its business, and (b) which shall not be less than those required under any additional reserve requirement applicable to it in respect of operational risk by virtue of subsection (6). (6) Either or both the level of additional reserves to be maintained by a credit union and the basis for calculating the additional reserves to be maintained by a credit union under this section in respect of operational risk may be prescribed by the Bank. For that purpose the Bank may also prescribe in respect of ancillary matters related to the additional reserves held in respect of operational risks. (7) A credit union that fails to meet any reserve requirement under this section— (a) may be required by the Bank to transfer all or part of its surplus to reserves, and (b) shall secure the written approval of the Bank before paying a dividend or loan interest rebate. (8) In prescribing matters for the purposes of this section, the Bank shall have regard to the need to ensure that the requirements imposed by the regulations made by it are effective and proportionate having regard to the nature, scale and complexity of credit unions, or of the category or categories of credit unions, to which the regulations will apply. (9) (a) Pending the prescribing by the Bank of reserve requirements for the purposes of this section in respect of credit unions generally or a category of credit unions, the reserve requirements applicable to credit unions under section 85 shall continue to apply generally or to such category of credit unions, as the case may be. (b) Where reserve requirements have been prescribed by the Bank for the purposes of this section in respect of credit unions generally or a category of credit unions, then section 85 shall cease to apply generally to that category of credit unions, as the case may be, in respect of the matters so prescribed.”. Appeal against certain decisions of Bank. 14.— The Principal Act is amended by substituting the following for section 52: “52.— The following decisions are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 : (a) a decision by the Bank under section 6A for the purposes of subsection (1) or (2) of that section; (b) a decision by the Bank under section 11(5) to direct a credit union to change its name to a name approved by the Bank; (c) a decision by the Bank under section 41(5) to direct a credit union to dispose of the interest to which the direction relates; (d) a decision by the Bank under section 49(3)(b) to refuse to grant approval; (e) a decision by the Bank under section 50(3)(a) to withdraw an approval granted under section 49; (f) a decision by the Bank under section 50(3)(b) to vary any condition imposed on such an approval; (g) a decision by the Bank to impose any condition on such an approval (whether at the time the approval is granted or later by virtue of section 50(3)(c)); (h) a decision by the Bank to give a regulatory direction under subsection (1) or (2) of section 87.”. Board of directors. 15.— (1) The Principal Act is amended by substituting the following for section 53: “53.— (1) A credit union shall have a board of directors which shall have responsibility for the general control, direction and management of the credit union. (2) The board of directors of a credit union shall be of sufficient number and expertise to adequately oversee the operations of the credit union. (3) Except in the circumstances set out in subsection (4), the number of directors shall be specified in the registered rules as set out in section 13 and shall be— (a) not less than 7, (b) not more than 11, and (c) an odd number. (4) The number of directors of a credit union may be more than 11 or may be an even number if an additional director is appointed under section 95A. (5) Each director of a credit union shall ensure that he or she has sufficient time to devote to the role of director and the responsibilities associated with that role as indicated by the nomination committee under section 56B(4)(g). (6) The board of directors of a credit union shall be elected— (a) where the organisation meeting occurs after the commencement of this provision (as amended by section 15 of the Credit Union and Co-operation with Overseas Regulators Act 2012), by secret ballot at the organisation meeting and, subject to subsection (15) and section 57, subsequent vacancies on the board of directors shall be filled by secret ballot at an annual general meeting, and (b) in any other case, by secret ballot at the annual general meeting first occurring after the commencement of this provision (as amended by section 15 of the Credit Union and Co-operation with Overseas Regulators Act 2012) or, if earlier than that annual general meeting, at a special general meeting called for the purpose of such ballot and, subject to subsection (15) and section 57, subsequent vacancies on the board of directors shall be filled by secret ballot at an annual general meeting. (7) The term of office of a director of a credit union— (a) shall begin at the conclusion of the general meeting at which the director is elected, (b) shall not extend beyond the third subsequent annual general meeting after his or her election, and (c) subject to paragraph (b), subsections (8) and (12) and all other applicable requirements of financial services legislation, shall be determined in accordance with the registered rules, but, except where this Act or any other applicable requirement of financial services legislation or the registered rules otherwise provides, a retiring director shall be eligible for re-election. (8) At each annual general meeting of a credit union the number of directors whose term of office expires shall, as near as possible, be the same. (9) Only a natural person of full age may be a director of a credit union. (10) The following persons are not eligible to become a director of a credit union: (a) an employee or voluntary assistant of the credit union or an employee of any other credit union; (b) a member of the board oversight committee of the credit union; (c) a director of any other credit union; (d) an employee of a representative body of which the credit union is a member, where that employee’s role could expose them to a potential conflict of interest; (e) a public servant (within the meaning of the Financial Emergency Measures in the Public Interest Act 2009 ) assigned to the Department of Finance and involved in advising the Minister on credit union issues or in the examination of credit union issues; (f) a member of the Commission of the Bank; (g) an officer (within the meaning of section 2 of the Central Bank Act 1942 ) or other employee of the Bank and who is involved in the regulation of credit unions; (h) the Financial Services Ombudsman (within the meaning of section 2 of the Central Bank Act 1942 ) or a Bureau staff member (within the meaning of section 57BA of that Act); (i) a member of the Irish Financial Services Appeals Tribunal or a member of its staff (including the Registrar of the Appeals Tribunal appointed under section 57J of the Central Bank Act 1942 ); (j) the chief executive of the National Consumer Agency, an authorised officer of that Agency (within the meaning of section 2 of the Consumer Protection Act 2007 ) or any other member of its staff; (k) the auditor of the credit union or a person employed or engaged by that auditor; (l) a solicitor or other professional adviser who has been engaged by or on behalf of the credit union within the previous 3 years; (m) a person who is a spouse or civil partner, parent, sibling or child of a director, board oversight committee member or employee of that credit union. (11) A person shall resign from being a director of a credit union if and when he or she becomes a person to whom any provision of subsection (10) relates. (12) A member of a credit union may not be appointed or elected to the board of directors if he or she has served for more than 12 years in aggregate in the previous 15 years on either the board of directors or the board oversight committee of thecredit union. (13) For directors of a credit union or members of the board oversight committee who were already directors or members of the board oversight committee on the date of the commencement of this section in respect of such credit union, the 12 year period set out in subsection (12) commences on the date this subsection so commences. (14) Directors of a credit union may not serve more than 3 consecutive years in any one principal post (as referred to in section 63) and a person who has been the holder of such a principal post shall not be eligible for re-election thereto until after the expiry of one year since he or she last held it. (15) Subject to the requirements set out in this section and all other applicable requirements of financial services legislation, the board of directors may at any time and from time to time appoint a member of the credit union (including a former director) to be a director to fill a casual vacancy. (16) A director appointed under subsection (15) shall hold office from the date of the appointment to the next following annual general meeting of the credit union or, if it is earlier, the next special general meeting at which an election is held for directors of the board of directors. (17) Where all the directors of a credit union intend to resign on the same date, the secretary shall give written notice of the directors’ intention to the Bank and the board oversight committee.”. (2) An amendment to the rules of a credit union passed in accordance with section 14(1) of the Principal Act to give effect to a reduction in the number of board of directors in compliance with that Act, shall have immediate effect notwithstanding section 14(2) of that Act. Operation of board of directors. 16.— The Principal Act is amended by substituting the following for section 54: “54.— (1) The board of directors of a credit union shall meet as often as may be appropriate to fulfil its responsibilities effectively and prudently and reflecting the nature, scale and complexity of the credit union, but in any event— (a) the board of directors shall hold at least 10 meetings in any year, and (b) the interval between any 2 meetings of the board of directors shall not be greater than 6 weeks. (2) Meetings of the board of directors of a credit union shall be chaired by the chair or, in his or her absence, by the vice-chair or, in the absence of the chair and the vice-chair, in a manner prescribed by the Bank or, if no manner is so prescribed, in a manner provided for in the rules of the credit union. (3) The secretary of a credit union shall keep minutes of all meetings of the board of directors. (4) Subject to subsection (10), the chair shall cause a detailed agenda of items for consideration and discussion to be prepared by the secretary of the credit union for each meeting of the board of directors. (5) The secretary of the credit union shall cause the detailed agenda and proposed minutes of the previous meeting of the board of directors to be circulated sufficiently in advance of each board of directors meeting to allow all directors adequate time to consider them. Where necessary, sufficient and clear supporting information and papers shall also be so circulated. (6) Nothing in subsection (4) or (5) shall be read as preventing discussion or consideration of any matter urgently arising that is not included in the detailed agenda but any such matter shall, without prejudice to subsection (7), be recorded in the minutes of the meeting concerned and, where appropriate or the board of the credit union so directs, clear supporting information and papers relating to the matter so arising shall be circulated as soon as practicable in the circumstances. (7) Minutes of all meetings of the board of directors shall— (a) be prepared with all decisions, discussions and points for further action being documented, (b) record all dissensions or minority votes in terms acceptable to the dissenting person or minority voter, and (c) provide sufficient detail to identify the nature and extent of the discussion on any matter and the decision or other outcome. (8) All discussions at board of directors meetings relating to conflicts of interest (whether of board members or otherwise) shall be recorded in sufficient detail in the minutes of the meeting concerned, together with a record of any action taken or proposed to be taken. (9) The minutes of each meeting of the board of directors shall be motioned for agreement and approval at the next subsequent meeting of the board of directors. Those minutes shall be so approved or approved subject to such qualifications and modifications as may be made to them at that subsequent meeting. Any such modification or qualification shall also be minuted in the minutes of that subsequent meeting. (10) In causing the agenda for a meeting of directors of a credit union to be prepared, the chair shall endeavour to ensure that adequate and sufficient time is provisionally allocated to all material relevant matters for discussion. (11) Directors of the board of directors shall attend every meeting of the board of directors unless they are unable to attend due to circumstances beyond their control. (12) The extent of the attendance of each board member at meetings of the board of directors shall be recorded in the minutes for the meeting concerned.”. Functions of board of directors. 17.— The Principal Act is amended by substituting the following for section 55: “55.— (1) Without prejudice to the generality of section 53(1), the functions of the board of directors of a credit union shall include the following: (a) setting the strategy for the credit union by preparing, including active participation and examination of strategies being developed or proposed by the manager, management team or others and preparing and adopting a strategic plan; (b) monitoring the implementation of the strategic plan by the credit union, reviewing the performance of the credit union against the measurements defined in the strategic plan and assessing, on a regular basis but at least annually, how the strategic objectives of the credit union are being achieved; (c) reviewing the credit union’s strategic plan on a regular basis, but at least annually, to ensure that it remains relevant and up to date and modifying or revising the strategic plan to incorporate any changes required as a result of the review; (d) operating a comprehensive decision-making process, considering all matters it considers to be of material relevance to the credit union and documenting the reasons for its decisions; (e) the appointment of a manager, risk management officer and compliance officer and the approval of the appointment of any other member of the management team; (f) ensuring that there is an effective management team in place; (g) reviewing the performance of the manager on an annual basis and monitoring on an ongoing basis his or her continued appropriateness to be the manager; (h) ensuring that the performance of every other employee and voluntary assistant, is reviewed and monitored on an ongoing basis to ensure his or her continued appropriateness for his or her role in the credit union; (i) identifying, in consultation with the manager, other officer positions within the credit union that— (i) are essential to the proper management of the credit union, (ii) are likely to enable the person holding the position to exercise significant influence on the conduct of the affairs of the credit union, and which, together with the manager and risk management officer of the credit union are referred to in this Act as the ‘management team’; (j) ensuring there is an appropriate succession plan in place in respect of each of the positions that constitute the management team; (k) exercising appropriate oversight over execution by the management team of the agreed strategies, goals and objectives; (l) reviewing and approving all elements of the risk management system on a regular basis, but at least annually and, in particular— (i) assessing the appropriateness of the risk management system, (ii) taking account of any changes to the strategic plan including the credit union’s resources or the external environment, and (iii) taking measures necessary to address any deficiencies identified in the risk management system; (m) ensuring compliance with all requirements imposed on the credit union by or under the Credit Union Acts 1997 to 2012 or any other financial services legislation; (n) the removal from office of an officer of the credit union, except directors or members of the board oversight committee, where the board of directors has duly determined that there has been a failure by the person concerned to perform duties or responsibilities; (o) approving, reviewing, and updating, where necessary, but at least annually, all plans, policies and procedures of the credit union, including the following: (i) lending policies including lending limits; (ii) policies in relation to members’ shares and deposits including the setting of a maximum number of shares a member can hold and a maximum amount that a member may deposit; (iii) liquidity management policies; (iv) reserve management policies; (v) investment policies; (vi) the designating of depositories for the funds of the credit union and signatories to cheques, drafts or similar documents drawn on thecredit union; (vii) standards of conduct and ethical behaviour for officers; (viii) remuneration policies and practices; (ix) compliance plan and policies; (x) records management policies; (xi) information systems and management information policies; (xii) business continuity plan; (xiii) asset and liability management policies; (xiv) outsourcing policies; (xv) risk management policy; (xvi) conflicts of interest policy; (xvii) such other matters as the Bank may prescribe; (p) the recommendation to members, for approval, of dividends to members; (q) ensuring the accounts of the credit union are submitted for audit; (r) reporting to the members of the credit union at the annual general meeting, including nominating a member of the board to present the annual accounts at the annual general meeting; (s) reviewing and considering any update of financial statements provided to the board by the manager under section 63A(4)(c). (2) In deciding on the roles, responsibilities and administrative structures and reporting relationships of all officers, the board of directors of a credit union shall ensure that no single person is responsible for making all of the material decisions of the credit union or has effective control over the business of the credit union. (3) The board of directors shall implement a risk management process that ensures that all significant risks are identified and mitigated to a level consistent with the risk tolerance of the credit union. (4) The board of directors shall carry out at least annually a comprehensive review of its overall performance, relative to its objectives and implement any necessary changes or improvements. (5) The review carried out by the board of directors under subsection (4) shall be documented in writing. (6) In respect of the exercise of functions by the board of directors of a credit union, the board shall set out in writing a register of matters or categories of matters that require the board’s approval and which cannot be assigned by the board to other persons for performance on the board’s behalf. The register shall be used to record all such approvals by the board of directors. (7) Where the board of directors causes any matter relating to its functions to be performed or carried out on its behalf, it shall continue to have responsibility for the matter. (8) The board shall regularly review, but at least annually, the performance and effectiveness of the internal audit function, including reviewing and approving the internal audit charter and the internal audit plan and reviewing and approving any modifications to them, ensuring they are updated and that any issues identified in the review are managed and rectified in a timely manner.”. Chair of board of directors, etc. 18.— The Principal Act is amended by inserting the following after section 55 (inserted by section 17 ): “55A.— (1) The board of directors of a credit union shall elect one of its number to be the chair of the board, subject to that person being eligible to be chair of a board of directors. (2) The chair of the board of directors of a credit union may be referred to by whatever title the rules of the credit union provide. (3) The functions of the chair of a credit union include the following: (a) ensuring that meetings of the board of directors operate in an efficient and effective manner; (b) encouraging constructive discussions and debate at board of directors meetings; (c) promoting effective communications between members of the board of directors and between the board of directors and the management team of the credit union; (d) causing the agenda to be set by the secretary, attending and chairing board of directors meetings; (e) ensuring that the responsibilities of the nomination committee, as set out in section 56B(4), are performed b …