By Chris Hutching
Friday 12th May 2000
|Text too small?|
Association of Credit Unions chief executive Doug McLaren said he understood it was on the agenda and could be achieved by an order in council rather than a change to legislation.
Ideally, credit unions would like the cap removed altogether now that they have fallen into line with a Securities Commission directive issued last year that they set up trust deeds with a requirement to maintain a reserve asset ratio of 10%.
Credit unions were given until April 2001 to comply but many smaller ones may only be able to meet the requirements by expanding deposits for new and existing members or by merging.
The Ministry of Economic Development is seeking industry views about whether the exemption on income tax enjoyed by credit unions would give them unfair advantage against other product providers or whether they are equally constrained by other legislative requirements. These include issues such as the common bond requirement of membership, statutory limits on borrowing and the size of loans in order to minimise risk.
The ministry favours an order in council lifting the deposit rate to $250,000 to facilitate credit union growth ahead of the May 2001 deadline for complying with the trust deed requirements of the Securities Act 1978.
Mr McLaren said the $250,000 was less than ideal but a lot better than $40,000. He hoped there would be further changes during a legislative review at the end of the year.
No comments yet
12th November 2019 Morning Report
MARKET CLOSE: NZ shares gain, retirement villages buoyed by Auckland housing market bounce
NZ dollar rises, shrugging off US-China trade war woes
Long-serving ACC investment chief calls it a day
Institutional investors continue to shun Fonterra
Card spending stalls; dearer petrol crowds out other goods
Abano directors cave to takeover by scheme of arrangement
Fletcher dismisses subcontractor claims as vague
11th November 2019 Morning Report
Odds favour a rate cut but it's a line ball call