Russian Credit Unions Tackle Safe and Sound Legislation and Regulation

Russian Credit Union League board of directors, and WOCCU delegation, Brian Branch, president and CEO (Interim) ; and board chairman, L.R. (Bobby) McVeigh meet with Credit Union Rainbow in Moscow

Madison, WI-The Russia Credit Union League recently launched a campaign to improve credit union legislation despite serious bank opposition. Current legislation limits the size of credit unions to only 2,000 members. Many credit unions either already exceed these limits or find that their restricted size severely limits the range of services they can provide. The Russia Credit Union League has begun policy dialogue with the Parliament, Central Bank and Ministry of Finance to put into place empowering legislation for credit unions and regulation supervision systems, which will strengthen the credit unions' ability to protect member savings.

Bobby McVeigh, chairman of the World Council of Credit Unions, Inc. (WOCCU) and Interim WOCCU CEO, Brian Branch, met with the Russia Credit Union League, Parliament and Ministry of Finance Officials to assure them that WOCCU will work with them to implement the PEARLS monitoring system and to assist with the development of legislation and regulation systems appropriate for credit unions. McVeigh explained to Central Bank officials, "Credit unions can provide financial services to many in Russia who today are unserved, and to do so will require legislation which allows them to grow."

The first credit unions appeared in Russia in 1865, growing to 14,000 in number and serving eight million members by 1916. By the mid- 1930's, credit unions had ceased operation under the Soviet system. It was not until the early 1990's that credit unions restarted in Russia; today there are more than 500 credit unions serving 250,000 members.

L.R. (Bobby) McVeigh, WOCCU board chairman (right) meets with Sergei Vasiliev, chairman of the committee on Financial Markets and Monetary Turnover.

The success of credit union development in Russia has depended in large part on the support and assistance of the Irish Credit Union League, which has assisted the Russia Credit Union League in starting credit unions; by the Soros Foundation which has supported league operations; and the Desjardines Society for International Development which has supported the creation of new credit unions.

In many rural areas and provincial towns of Russia there are no formal financial institutions. Most former state system banks have closed their offices and private banks do not exist. Today credit unions have become the only alternative to provide individuals with financial services in many smaller communities.

World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.

World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 51,000 credit unions in 100 countries serve 196 million people. Learn more about World Council's impact around the world at www.woccu.org.