WOCCU Urges FATF to Reduce Regulatory Burden for AML/CFT Requirements

Volume 8, Number 5
April 30, 2019

WOCCU Urges Reduced Regulatory Burden for AML/CFT Requirements

World Council of Credit Unions (WOCCU) urged the Financial Action Task Force (FATF) to embrace proportionality in the application of anti-money laundering/countering the financing of terrorism (AML/CFT) regulations at the group’s Private Sector Consultative Forum, held May 6-7 at the United Nations Office on Drugs and Crime. FATF is the global standard setting body for AML/CFT rules and conducts periodic “mutual evaluations” of national-level AML/CFT supervision.

Specifically, World Council urged FATF to provide clear guidance on the use of digital identities so responsibilities surrounding their use are clearly defined without imposing undue regulatory burden.  Likewise, with respect to responsibilities such as determining the Beneficial Ownership of legal entities for “know-your-member” regulations, WOCCU urged FATF to encourage national-level regulators to use a tiered approach that distinguishes between lower-risk and higher-risk members. Such proportional tailoring could greatly reduce the regulatory burden for credit unions that typically serve less-complex legal entities, are smaller in size and have field-of-membership restrictions.

The FATF Private Sector Consultative Forum is an annual event featuring panel discussions with key financial regulatory experts from across the globe.

European Union Approves CRD IV Exemption for the Netherlands

The European Network of Credit Unions (ENCU), the WOCCU led group of European Credit Unions advised by World Council conducted advocacy that led to the adoption of an exemption from the European Capital Directives Requirements (CRD IV). This exemption will allow Dutch credit unions to be able to accept deposits. The ENCU-led advocacy plan took place at various levels including DG FISMA in the European Commission, the European Parliament and finally the Council of the EU, culminating in the adoption of the interinstitutional agreement on the amendment of the CRD in April 2019. The latter enshrined the Dutch CRD exemption into law. 

European Commission adopts ENCU Advocated Position on Review of CRD Exemptions

ENCU pressed the European Parliament and the Council of the EU to use their influence with the European Commission to reject a proposal to include a 5-year review clause in the amended version of the CRD. If  the review process had been adopted, said clause would have given considerable powers to the European Commission to not only grant new CRD exemptions but also to re-assess current exemptions with the possibility of scrapping existing exemptions retroactively. ENCU’s advocacy efforts convinced both MEPs (to a lesser extent) and individual member states of the dangers of ceding so much power to the European Commission. Both institutions opted to back ENCU’s position against the introduction of a 5-year review clause. 

ENCU Position on Net Stable Funding Ratio Adopted by EU

ENCU’s position on the application of the Net Stable Funding Ratio (NSFR) was adopted by the EU.  ENCU strongly supported DG FISMA’s proposed amendment to the NSFR regime (medium term liquidity) for credit unions’ term deposits held by banks because it was consistent with the definitions used in the EU’s LCR (short term liquidity).  Credit unions’ deposits held by banks are sticky and stable and should receive treatment under the NSFR that is consistent with the LCR definitions. A series of successful meetings with the rapporteur of the file and influential member states ensured that ENCU’s preferred option was adopted in the last plenary of the European Parliament’s current legislature.


Andrew T. Price. Esq., BSACS, CUCE, CUERME
Regulatory Counsel
World Council of Credit Unions (WOCCU)
99 M St., SE, Washington, DC 20003 USA
Office: +1-202-508-6776 | Mobile: +1-850-766-5699 |

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