The European Banking Authority (EBA) called for input to understand the impact of de-risking on financial institutions and customers. The European Network of Credit Unions responded to the EBA’s directed questions and highlighted that credit unions are often the subject of de-risking by banks. Reasons for this include perceived regulatory burden and risks associated with AML/CFT requirements and the potential to eat into profits; confusion surrounding responsibility associated with AML/CFT requirements; and conflicting privacy standards in various countries creating difficulty navigating cross-border operations. ENCU noted that de-risking has reduced access to bank services causing credit unions to seek these services from second and third tier banks, which in turn has proven to be costly and burdensome, and therefore a deterrent to the provision of these services to its members.

ENCU’s comment letter to the EBA regarding the impact of de-risking on financial institutions can be found here.