The impact of regulation on credit unions in Ireland

Abstract

This research paper presents results on the impact of regulation on credit unions in Ireland. The researcher seeks to answer following research question. How are credit unions in Ireland regulated and what is the impact of this regulation. To help answer this question it was necessary to simplify the research question further into research objectives. A critical review of the literature identified the answer to the first part of the question. The Financial regulator now regulates credit unions and the main piece of legislation is the Credit Union Act 1997. Following a review of the possible methods of primary research, it was decided that a questionnaire would be circulated to credit unions in order to determine the answer to the second part of the research question. Based on an analysis of 42 questionnaire replies, the findings of this research indicate that credit unions believe that a change in the credit union movement is required and that regulation is both necessary and important. Credit unions also believe that regulation needs to be independent of the credit union movement. The findings of the research also indicate that credit unions feel particular areas within the movement are too restrictive. In particular the areas of investments and lending were evident. When size is the focus for analysis, the evidence provides that large credit unions are more aware of change and that they are more willing to change. This is evident from the fact that so many large credit unions have implemented new policies, procedures and controls. This suggests that large credit unions are more pro-active than small credit unions.