Credit Unions: The New Regulatory Regime and Amendment to Loan Interest Rate

Overview

The Isle of Man Financial Services Authority has today issued Consultation Paper CP18-06/T03 on the new regulatory regime for credit unions and amendment to the existing loan interest rate.

Why We Are Consulting

The purpose of this consultation is:

• To obtain views about the proposed credit unions’ regulatory regime that will be enacted in secondary legislation made under the Financial Services Act 2008
• To seek views on the proposed increase to the maximum interest rate payable by borrowers on loans made by credit unions under the Credit Unions Act 1993 (as amended in 2018)

What Happens Next

Following the closure of the consultation period the Authority will publish a summary of the comments received.

Subject to views expressed in response to the consultation, the Authority will seek to progress all items of legislation through Tynwald together and bring them into operation as soon as possible thereafter.

Although no further changes to credit unions legislation are planned now, in due course:

• consideration may be given to permitting the issue of deferred shares
• consideration may be given by Government to establishing a compensation scheme for savings in credit unions
• other changes to limits in the Act may be considered