Public consultation on proposed policy changes relating to credit co-operatives

The Government is proposing to revise and put in place new policies to enhance the governance and management of credit co-operatives to protect members’ deposits and strengthen the sector.

Feedback from the stakeholders and public will help to shape policies on the regulation of credit co-operatives

1. The Government is proposing to revise and put in place new policies to enhance the governance and management of credit co-operatives (“credit co-ops”) to protect members’ deposits and strengthen the sector. It is seeking views from the credit co-ops, co-op members and the public on the proposed changes through this public consultation from 22 December 2014 to 2 February 2015. This is part of the ongoing process by the Government to strengthen regulatory oversight of the sector so as to better protect members’ interests and uphold public confidence in credit co-ops.
2. Credit co-ops are membership-based entities which provide thrift and loan services to their members. Currently, there are 27 registered credit co-ops in Singapore. Credit co-ops serve a useful social role in encouraging savings and providing loans at reasonable interest rates to their members. However, to be effective in serving this social role, they must be financially sound and professionally run. Given the deposit-taking function and growing membership, it is necessary to subject these co-ops to appropriate regulatory oversight so as to protect members’ interests.
   
3. The Ministry of Culture, Community and Youth (MCCY) recently conducted a review on the policies and rules governing credit co-ops, with the objective to further strengthen the sector. The proposed changes are in three broad areas as follows:
   
   1. Raising prudential standards and promoting compliance;
   2. Improving governance standards; and
   3. Enhancing regulatory powers to deal with distressed and errant credit co-ops.
4. Upgrading prudential standards, governance practices and capability is a pre-requisite for the sustainability and growth of the credit co-op sector. The proposed changes seek to better safeguard members’ interests by further strengthening our credit co-ops in terms of financial prudence as well as governance and management capabilities. The proposed changes are targeted for full implementation by 2018.
   
   

   Public consultation

5. The proposed changes are now open to views/suggestions from the credit co-ops, co-op members and the public from 22 December 2014 to 2 February 2015and the Consultation Paper is available here.
6. Members of the public may send their feedback and suggestions electronically to email: “mccy_regcoop@mccy.gov.sg” or via hard copy to the address below.