What Credit Unions Face

In today’s regulatory environment, many financial rules are set at the international level.

National regulators often have limited discretion to deviate from international standards once they are finalized. Much of this framework is designed to address the needs of large and internationally active banks, and is not intended for smaller institutions such as credit unions. The framework often does not contemplate the not-for-profit cooperative structure. 

This is important because the incentives of each institution are quite different. Credit unions are inherently less risky and do not need the sophistication of regulation that the large banks require.

Therefore, many of the regulations adopted for large banks are not appropriate or necessary for smaller, domestic credit unions.

What We Do

World Council of Credit Unions is the only trade association advocating on behalf of credit unions in front of key international standard setting bodies, including the: 

• Basel Committee on Banking Supervision (Basel Committee);
• Financial Action Task Force (FATF) oversees AML/CFT regulations;
• International Accounting Standards Board (IASB);
• Financial Stability Board (FSB); and
• International Association of Deposit Insurers (IADI).

World Council's International Advocacy work has succeeded in reducing regulatory burdens for credit unions in the areas of prudential regulation, anti-money laundering, taxation and accounting standards.

A Record of Success

Our recent policy successes include:

• Winning key updates to the Core Principles for Effective Banking Supervision that is now incorporated into the Basel Framework. The updates provided strong language on proportionality, allowing national-level regulators critical flexibility.
• The G20 New Delhi Leaders’ Declaration included a clear directive on proportionality for sustainability standards (climate-related disclosures), a top WOCCU advocated position. It also renewed, with WOCCU’s continued urging, the importance of financial inclusion and the impact on local communities.
• Advocating for and receiving updated guidance and support from the Financial Action Task Force (FATF) regarding key anti-money laundering issues related to a credit union's ability to serve their community.
• Advancing the visibility of the global credit union movement’s regulatory challenges with key international standard setters, including FATF’s Private Sector Consultative Forum, the United Nations Department of Economic and Social Affairs (UN DESA) Expert Group Meeting, and ongoing meetings with representatives from the European Union
  
• Obtaining favorable language from the Financial Stability Board (FSB) on cybersecurity issues, including proportionality and regulatory burden reduction for smaller community-based financial institutions in the Recommendations to Achieve Greater Convergence in Cyber Incident Reporting.
• Leading executives from WOCCU Direct Member organizations in Australia, Canada, Poland and the United States on a sweep through three countries to visit with key International Standard Setting Bodies and urge support for the credit union cooperative model.
• Engaging with key European Union (EU) officials and select Members of the EU Parliament to obtain favorable considerations for credit unions on such issues as the Digital Operational Resilience Act, the EU Payment Package and the Consumer Credit Directive.