AUCKLAND, N.Z.–New Zealand’s credit unions are hailing the passage of legislation in this country.
Co-op Money NZ, the industry association for credit unions, said the unanimous passing in Parliament of the third reading of the Friendly Societies and Credit Unions Bill is a significant milestone and endorsement for the future of the New Zealand credit union sector.
Co-op Money NZ Interim Chief Executive Officer Jonathan Lee said the bill will herald in a new era of growth and innovation for New Zealand’s credit unions, which represent more $1 billion in total assets and 70 branches spanning the length of the country.
Under the legislation, credit unions will no longer need trustees to hold assets or operate their businesses, which Lee said is an inefficient bureaucratic requirement. “The bill does away with the need for credit unions to have trustees which will reduce a layer of complexity and cost and make it much simpler to do business for the benefit of our members,” he said. “This bill modernizes the out-of-date legislation credit unions have had to operate under and means we can continue to provide the 190,000 credit union members with access to the latest core banking services but under a much more efficient structure by becoming bodies corporate with full capacity and powers of a natural person.”
Other Aspects of Bill
Among other things, this bill also allows credit unions to more easily expand services to include lending to small and medium sized enterprises (SME) in the next 12 months.
Lee said lending to SMEs will be very important in New Zealand’s small, regional towns where many credit unions operate as pivotal parts of their communities. “Undoubtedly it will give the regions a much needed boost.”
The bill also removes ambiguity, and allows Co-op Money NZ to deliver even more competitive, innovative banking and payment services at reduced cost to its member credit unions and other financial institutions in New Zealand, according to Lee.