Co-op Money NZ wins credit union legal fight
Co-op Money NZ, the industry body for credit unions and mutual building societies in New Zealand, has won its legal fight to continue providing wholesale banking.
The organisation has successfully appealed against the decision of the Registrar of Friendly Societies and Credit Unions.
By way of recap, earlier this year, a former Co-op member, Westforce Credit Union, expressed its worries that the Co-op was offering services to non-members, which Westforce claimed went against the law and created a financial risk for members.
Westforce complained to the Registrar, which determined the Co-op was only allowed to provide those services to members and a legal war ensued. (During the battle, Co-op chairman Steve Nichols quit the board after just over a month in the job.)
However, the Co-op now says the result of the High Court’s decision means it can continue to serve member credit unions, associates and third parties throughout the nation.
Henry Lynch, CEO of Co-op Money NZ, says it’s been operating within its rules and “within the parameters” of the Friendly Societies and Credit Unions Act 1982 – and the decision is a “major affirmation of the services that the organisation delivers”.
He adds: “Co-op Money NZ is one of the first non-banks in the world to be granted the right to implement the tier 1 Oracle Flexcube banking platform – one of our member credit unions ACU has successfully migrated onto Flexcube with NZCU Baywide to follow next.”
The Co-op is also seeking amendments to modernise the Act.
Lynch explains: “The Act is not fit for purpose and is unable to keep pace with technology or other modern business developments. The Bill will update the Act to simplify compliance costs and better enable credit unions and associations to support their members.”
As reported back in June, it said it fully backed the new credit union law.