Legislative proposal for Dutch Act on the supervision of credit unions

The legislative proposal for a Dutch Act on the supervision of credit unions (link, in Dutch), submitted in May 2014 to the House of Representatives, intends to create a regulatory framework for credit unions and to simplify the formation thereof. The House of Representatives supports the proposal, but during the debate on this proposal on 4 March 2015 (link, in Dutch) it was also clear that there remain questions about how exactly these credit unions should be implemented. Questions were asked about the extent to which credit unions should inform lenders about the risks they run and there was criticism of the rule that credit unions are not allowed to lend more than 2.5% of their money to one company as well as of the level of the supervisory costs.

Credit unions are cooperatives in which entrepreneurs unite, by branch of industry or by region, and lend each other money. The legislative proposal regulates that credit unions of limited size (less than € 10 million) are exempted from the licensing requirement for credit unions. Credit unions up to € 100 million and 25,000 members need a license from DNB in order to conduct the business of a credit union. Cooperatives that have more money to distribute, need a license as a bank. For SMEs credit unions provide an alternative source of funding.