ENCU Top Advocacy Successes of 2017-2019

BRUSSELS—Advocacy is the raison d’etre of ENCU and its presence in Brussels. In the last two years ENCU, with the help of its members, has worked tirelessly to both bring more credit union awareness to the EU level but also to influence European financial regulations in such a way as to allow credit unions to continue to operate and grow in Europe. Here are our top 8 success stories in the last two years.

1. Officialisation of The Netherlands CRD exemption in the adopted versions of the CRD IV.
In 2017 ENCU’s Dutch members VNK convinced its national Ministry of Finance to support the inclusion of a credit union exemption for Dutch credit unions into the upcoming reform of the CRD. An ENCU-led advocacy plan subsequently took place at various levels, DG FISMA in the European Commission, the European Parliament and finally the Council of the EU culminating in the adoption of the interinstitutional agreement on the amendment of the CRD in April 2019. The latter enshrined the Dutch CRD exemption into law. 

 2. Deletion of the European Commission proposed 5-year review clause.
In parallel to ENCU’s engagement on the Dutch CRD exemption, several meetings were conducted with the European Parliament and the Council of the EU to advocate against the European Commission’s proposal to include a 5-year review clause in the amended version of the CRD. If adopted, said clause would have given considerable powers to the European Commission to not only grant new CRD exemptions but also to re-assess current exemptions with the possibility of scrapping them retroactively. ENCU’s advocacy efforts convinced both MEPs (to a lesser extent) and individual member states of the dangers of ceding so much power to the European Commission. Both institutions opted to back ENCU’s position against the introduction of a 5-year review clause.

 3. Preferred application of the Net Stable Funding Ratio (See newly adopted CRR2)
ENCU’s position on the application of the NSFR was less controversial as the European Commission had agreed from the onset to apply the European Banking Authority recommendations but some advocacy was still required at the European Parliament and Council levels. ENCU strongly supported DG FISMA’s proposed amendment to the NSFR regime (medium term liquidity) for credit unions’ term deposits held by banks because it was consistent with the definitions used in the EU’s LCR (short term liquidity).  Credit unions’ deposits held by banks are sticky and stable and should receive treatment under the NSFR that is consistent with the LCR definitions. A series of successful meetings with the rapporteur of the file and influential member states ensured that ENCU’s preferred option was adopted in the last plenary of the European Parliament’s current legislature.

 4. Positioning of ENCU as credible stakeholder in the European Commission’s upcoming evaluation of the Consumer Credit Directive (or CCD).
Due to recent research and networking in Brussels, ENCU managed to get in touch with both the European Commission officials in charge of the evaluation of the CCD and the private sector consultancy entrusted with producing a European Commission study on the current relevance of CCD (5 years after its initial implementation). ENCU was subsequently invited by said consultancy to take part in both a phone interview and a written questionnaire as to what could be improved in the current version of the CCD to improve its implementation in an ever-changing financial services market.

 5. Current exclusion of CRD exempted entities from contributing to the European Deposit Insurance Scheme (or EDIS).
Although there has been little movement (due to political disagreements between member states) of the EDIS file in recent months, meetings with the MEP in charge of the file and key permanent representations have led to the exclusion of CRD exempted entities (which include ENCU credit unions movements in the Eurozone) from the scope of EDIS. This means in essence that credit unions will not have to contribute to the EDIS outside of their national deposit guarantee schemes (if applicable). Albeit a temporary win for now this is nevertheless a very important achievement for the credit union movement in the Eurozone.

 6. Organisation of successful of high-level “study tours” for Ukrainian financial services regulators and legislators to meet EU officials (Permanent Representations, European Commission and MEPs).
Every year ENCU provides operational assistance to a group of high-level Ukrainian financial services regulators and legislators led by our Polish ENCU member (Pawel Grzesik, Senior Policy Advisor of USAID/WOCCU Credit for Agriculture Producers Project and the Director at the National Association of Co-operative Savings and Credit Unions (NACSCU). The latter group gathers in Brussels to meet with a variety of EU officials in order to establish a working relationship between decision makers on both sides but also to continuously raise awareness of credit union movements. The last two iterations of the Ukrainian “study tour” have been particularly fruitful as several meetings with the European Commission were held and produced added value for the Ukrainian officials. Both “study tours” helped the Ukrainian authorities, including the Regulator, to clarify the European Commission’s position and process leading to a potential exemption from CRD IV/CRR II for Ukraine’s credit union sector.

 7. Invitation to participate in focused EBA workshop on the implementation of the methods for calculating contributions to deposit guarantee schemes.
In the summer of 2017, ENCU was invited to an EBA workshop on the implementation of the methods for calculating contributions to deposit guarantee schemes. This was a small committee event at which ENCU once again raised awareness of the credit union model but also presented its contribution to the EBA’s public consultation on the same issue (please see here). The invitation to the EBA’s workshop was important to ENCU because it provided an opportunity to discuss core credit union issues at the heart of where European financial services regulation takes place. The EBA was receptive to ENCU’s concerns and featured the latter in its final report.
The general increase of awareness of the European credit union movement within the European Commission (DG FISMA) and within the European Parliament.
It is undeniable that the last two years have been years in which awareness about credit unions and their functioning has increased among the EU’s technocrats (the European Commission) but also amongst MEPs. The latter was best evidenced by increased attendance to ENCU’s Interest Group meetings but also through the quality of the exchanges ENCU members had with EU officials during bilateral meetings.