European Network of CUs Engages EU Policymakers on Basel Rules, FATCA and Financial Inclusion
ENCU representatives meeting with policymakers in Brussels included (from left) Anne Schneider, Policy Action; Breege-Anne Murphy, ILCU; Michael Edwards, World Council; Ed Farrell, ILCU; Brian McCrory, ILCU; Paweł Grzesik, NASCU (Poland); and Matt Bland, ABCUL.
BRUSSELS — Representatives from the European Network of Credit Unions (ENCU) and World Council of Credit Unions met with European Union (EU) policymakers in Brussels on May 14-15. The group advocated for a reasonable interpretation of Basel Committee liquidity rules with respect to EU credit unions and also advocated for favorable European credit union treatment under the U.S. Foreign Account Tax Compliance Act (FATCA) and related European rules. In addition, ENCU members discussed with policymakers upcoming EU rules on the provision of basic current accounts to the unbanked in order to promote financial inclusion.
ENCU representatives included Matt Bland, Association of British Credit Unions, Ltd. (ABCUL) policy and communications officer; Paweł Grzesik, National Association of Co-operative Savings and Credit Unions (NACSCU) Warsaw representative (Poland); Brian McCrory, Irish League of Credit Unions (ILCU) director; Ed Farrell, ILCU head of finance; and Breege-Anne Murphy, ILCU legal and secretariat department supervisor.
Regarding the EU's interpretation of Basel liquidity rules, the ENCU group met with the European Commission to urge that credit unions be treated similarly to other depository institutions in terms of how credit union deposits at banks are classified under the Basel "Liquidity Coverage Ratio." Though credit unions are not subject to the Liquidity Coverage Ratio, commercial banks in Ireland have told Irish credit unions that they are being classified as "non-bank financial institutions" — a category that applies to non-depository institutions — for purposes of draft European liquidity guidance. Banks are therefore cutting the yields they will pay on credit union demand and term deposits. This treatment under the EU's Basel liquidity rules may cost the Irish credit union movement as much as €58 million a year in lost income unless clarified by EU regulators to grant credit unions more favorable treatment. ENCU representatives will engage the European Banking Authority on this issue next week in London.
"We believe that there has been some level of confusion regarding classification of credit unions for Basel liquidity purposes in Ireland and possibly other member states," said Michael Edwards, World Council vice president and chief counsel.
"We will continue to engage European authorities on this issue to seek an outcome that is satisfactory for credit unions."
ENCU members also met with European Commission representatives regarding the impact of FATCA on EU credit unions as it relates to European data protection regulations as well as the likely upcoming tax information-sharing amendments to EU directives in order to create what some have called a "European FATCA." Though the European Commission envisions the European version of FATCA as focusing on tax information-sharing within the EU, they also expect the Paris-based Organization for Economic Co-operation and Development to establish a global version of FATCA that would apply to credit unions in all, or nearly all, jurisdictions in the world.
ENCU members also met with European Commission representatives to urge adoption of rules on basic current accounts for the unbanked that would enable credit unions to continue engaging in outreach to underserved individuals on a level playing field with banks and without undue regulatory burdens. The group also discussed with policymakers an upcoming directive on deposit guarantee schemes and forthcoming revisions to the EU's anti-money laundering directive.
ENCU is a network of national credit union associations in Europe and World Council representatives who educate and engage with EU policymakers and other stakeholders on legislation that affects credit unions. ENCU was formally established in 2010 and is based in Brussels. Learn more at www.creditunionnetwork.eu.
El Consejo Mundial de Cooperativas de Ahorro y Crédito es la asociación gremial y agencia de desarrollo para el sistema internacional de cooperativas de ahorro y crédito. El Consejo Mundial promueve el crecimiento sustentable de las cooperativas de ahorro y crédito y otras cooperativas financieras en todo el mundo a fin de facultar a las personas para que mejoren su calidad de vida a través del acceso a servicios financieros asequibles y de alta calidad. El Consejo Mundial realiza esfuerzos de defensa activa en representación del sistema global de las cooperativas de ahorro y crédito ante organizaciones internacionales y trabaja con gobiernos nacionales para mejorar la legislación y la regulación. Sus programas de asistencia técnica introducen nuevas herramientas y tecnologías para fortalecer el desempeño financiero de las cooperativas de ahorro y crédito y profundizar su alcance comunitario.
El Consejo Mundial ha implementado 290 programas de asistencia técnica en 71 países. A nivel mundial, 57,000 cooperativas de ahorro y crédito en 105 países atienden a 217 millones de personas. Obtenga más información sobre el impacto global del Consejo Mundial en www.woccu.org.
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Organización: World Council of Credit Unions
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