Development Best Practices in Credit Union Supervision: Registration of Existing Credit Unions with a Regulatory Authority

This paper details the process of formal regulation of a credit union. It discusses the expansion in the services that credit unions offer and the need for them to be regulated by an agency that is dedicated solely to financial institutions.

The paper suggests tips for the selection of the regulatory authority:

• The responsibility of supervision would be given to the existing banking regulatory agency, assuming that it fulfills certain conditions;
• Keeping banking and credit union supervision together in one institution facilitates a consistent regulatory approach;
• It would be best to create a separate credit union department within the overall regulatory agency.

The paper discusses:

• The changes that will have to be made to the existing laws and regulations and the issues to be considered in the process;
• The tasks that these new laws will have to perform;
• The required written documentation for a licensing application;
• The necessity to give new credit unions adequate time to comply with the new regulatory requirements.

The paper concludes by discussing the four stages that credit unions can engage in to meet regulatory requirements and get involved in financial intermediation.