Consultation
68. The Reserve Bank of New Zealand, the Treasury, the Inland Revenue Department, the Securities Commission, and the Registrar of Credit Unions were consulted about the proposals discussed in this paper.
69. The issues considered by the 2002 discussion document were essentially similar to the proposals outlined in this paper. NZACU members generally supported changes to the common bond, allowing share offers and variation of statutory restrictions on borrowing, investment and capital reserves, allowing associations to offer new services without ministerial approval, and allowing incorporation. Most NZACU members did not support the introduction of a conversion mechanism. As previously noted, Manchester Unity members generally opposed all of the proposed changes until the two associations reached agreement as outlined in their Statement of Agreed Principles.
70. The New Zealand Bankers' Association, the Financial Services Federation, did not support any reforms unless credit unions' tax exemption is reviewed. The Law Society and the Investment Savings and Insurance Association noted that if credit unions are allowed to expand beyond their traditional and unique community purpose, the tax exemption would give them an unfair advantage. The Law Society also objected to the relaxation of the common bond requirement unless credit unions are placed under the same governance and supervision standards as other deposit-takers. While agreeing that there may be room for modernising restrictions on borrowing, investment and reserves, the Law Society supported the retention of statutory "minimum" standards.
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