The chief executive of the Financial Regulator has responded to complaints from credit unions that the sector is over-regulated.
Speaking at the World Credit Union conference in Dublin, Pat Neary said the growth in savings in credit unions, and their more complex business model, demanded increased oversight.
'The potential impact on all credit unions from the failure of just one should not be underestimated,' he said. Mr Neary added that credit unions that adopted riskier and more aggressive strategies should expect increased regulation.
He said the regulator was committed to modernising the regulatory framework through legislation that would allow it to regulate in 'an open and responsive' way.
Mr Neary added that a current 'one size fits all' approach was not sustainable. He said regulation needed to be able to deal with those credit unions who were able to carry out more sophisticated activities, but also with those who wanted to continue with the traditional model.
He cited figures showing that 86% of the larger credit unions provided loans of more than €50,000 to individual members, while they were also attracting larger amounts of shares and deposits.
