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Russian CUs prepare for new law
MOSCOW (2/10/10)--A multinational credit union delegation visited with Russian credit unions last week to help the country's budding movement prepare for new regulatory legislation.
Click to view larger image Participants in the World Council of Credit Unions’ (WOCCU) visit to Moscow to help Russia’s nascent credit union movement prepare for new regulatory legislation included (from left): Russian Credit Union League (RCUL) CEO Alexander Solomkin; Irish League of Credit Unions Foundation Executive Director Alan Moore; WOCCU Executive Vice President and Chief Operating Officer Brian Branch; RCUL Chairman Valery Kasatkin; Polish Credit Union Foundation representative Pawel Grzesik; and Louisiana Credit Union League President/CEO Anne Cochran. (Photo provided by World Council of Credit Unions)
The new law, signed by Russian President Dmitry Medvedev in 2009, requires all Russian credit unions to register with the government and meet new federal financial standards by August 2010. World Council of Credit Unions (WOCCU) Executive Vice President and Chief Operating Officer Brian Branch headed the delegation, convened by the Russian Credit Union League (RCUL), a WOCCU member organization. Under the new guidelines, credit unions must meet certain financial standards affecting share capital, capital reserves, loan portfolio concentration limits, deposit concentration limits and investment limits. RCUL is training credit unions to meet criteria for registration, said Valery Kasatkin, RCUL chairman. “Our first priority is to help credit unions prepare for the new law and create the required regulatory structure,” Kasatkin said. The delegation's role was to provide input and offer guidance in support of those training efforts, he added. In addition to WOCCU’s Branch, the multinational delegation included Anne Cochran, president/CEO of the Louisiana Credit Union League; Alan Moore, executive director of the Irish League of Credit Unions Foundation; and Pawel Grzesik, representing the Polish Credit Union Foundation. Last week’s delegation mapped out assistance strategies to support the Russian credit unions’ transition to the rigors of the new regulatory regime. “By working together, we can gain greater leverage and efficiency in supporting the Russian league's preparation for the new regulatory framework,” Branch said. All delegation members have prior experience with RCUL. The Louisiana league, which maintains an ongoing exchange with the Russian association through the WOCCU International Partnerships Program, provided past assistance to RCUL in the form of training programs. The Irish foundation previously supported credit unions and their provincial federations in the St. Petersburg, Karelia and Dubna regions. The Polish foundation assisted Moscow-based RCUL for several years. By August 2011, a year from the new law’s implementation, all Russian credit unions must be affiliated with self-regulatory organizations (SROs)--non-commercial entities that oversee deposit-taking financial institutions. The SROs will monitor member cooperatives to ensure continued compliance with standards required under the legislation. RCUL will prepare an SRO for its member credit unions, while some regional provinces will organize their own SROs. It is likely that up to 10 SROs will exist in Russia by year-end. Each organization will register with and report credit union conditions to the Ministry of Finance, which now serves as Russia's credit union regulator. Legislation prior to 2009 limited credit unions to no more than 2,000 members, severely constraining the institutions’ ability to grow, said WOCCU. Credit unions that exceeded the 2,000-member limit had to convert to civil code organizations, putting them on equal footing with other not-for-profit and commercial entities, or run the risk of regulator intervention. The new law no longer limits the size of membership. Credit unions that serve more that 5,000 members must report to both their SRO and the Ministry of Finance. RCUL has 142 member credit unions serving roughly 250,000 members.
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