News

16 April 2024

The Implications of the Amended Minimum Competency Code (MCC) 2023 for Credit Unions

What is the Amended Minimum Competency Code

The Minimum Competency Code 2017 (MCC 2017) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48 (1)) Minimum Competency Regulations 2017 (MCR 2017) came into effect on 3 January 2018.

Both the MCC and MCR set out minimum professional standards for persons providing certain financial services, in particular when dealing with consumers. The aim of the standards is to set a minimum acceptable level of competence that consumers can expect from individuals acting on behalf of regulated firms in terms of advice and information about the products and services that those financial institutions provide.

The MCC 2017 specifies certain minimum competencies that persons falling within its scope must comply with when performing certain controlled functions.

With effect from 1 October 2024, the MCC 2017 and MCR 2017 will apply to all in-scope activities for credit unions.

These regulatory changes are being introduced with a view to ensuring that credit union members are afforded the same level of protection as consumers availing of similar products and services from other regulated entities.

The MCC specifies certain minimum competencies for individuals and is closely linked with the Fitness and Probity Regime while the MCR places obligations on the credit union itself.

What does this mean?

From 1 October 2024, those involved in the lending and term deposit functions must have an appropriate qualification. These individuals must also maintain appropriate CPD. 

We have captured relevant information in a single document - click here to access.

Continuing Professional Development (CPD)

Credit union staff must also complete 15 hours of Continuing Professional Development (CPD),

  • CPD hours may be obtained by attending seminars, lectures, conferences etc and must be certified.
  • CPD hours must be directly relevant to the role of the person.
  • CPD must be accredited by the provider of a recognised qualification.
  • Maximum is eight hours in any day and four hours on a single topic.
  • At least one hour must relate ethics.

Fitness & Probity (F&P)

The Central Bank has amended the definition of “Controlled Function” in the Minimum Competency Regulations 2017 and the Fitness and Probity Regulations for credit unions, to introduce additional member-facing Controlled Functions –CU CF’s 3-8.

Who is now covered by F&P

  • CUPCF – 1 (Chairman)
  • CUPCF - 2 (CEO/Manager)
  • CUPCF – 3-5 (Risk Officer, Internal Audit, Financial Controller - €100 million CU +)
  • CUCF – 1 (Board of Directors, Risk Management Officer, Credit Committee, Credit Control Committee, Membership Committee, Nomination Committee, Management Team)
  • CUCF – 2 (Board Oversight Committee, Compliance Officer, AMLCO, Internal Audit)
  • CUCF – 3-8 (Amended MCC 2023) (In effect from 01 October 2024)
  • CUCF – 3 (Applies to an individual who gives advice to a member of a credit union, in the course of providing, or in relation to the provision of the financial service.
  • CUCF – 4 (Individuals arranging, or offering to arrange, a financial service for a member of the credit union)
  • CUCF – 5 (Assisting a member of a credit union in the making of a claim under a contact of insurance or reinsurance)
  • CUCF – 6 (Determining the outcome of a claim arising under a contract of insurance or reinsurance)
  • CUCF – 7 (Acting in the direct management or supervision of those person who act for a credit union in provide the services referred in CUCF 3-6)
  • CUCF – 8 (Individuals adjudicating on any complaint communicated to a credit union by a member in relation to the provision of a financial service)

To aid compliance, Credit Unions should ensure the following are in place:

  1. An MCC Register – to identify and capture all officers to whom MCC applies through their involvement with Mortgages or insurance currently, and from the 1st of October 2024, Loans and Term Deposits. This register must list out the relevant MCC qualification and CPD membership status of the individual, including the progress on meeting the CPD requirements such as the completion of mandatory topics and relevant CPD hours.
  2. F&P Register – Which identifies all controlled function holders within the Credit Union.
  3. Annual Review of Training & a Training Register/Plan – Which outlines timelines, development needs, experience and skills.

Next Steps for Credit Unions

Credit Unions should undertake a project to prepare for the implementation of MCC.

  • Set out a plan to ensure unqualified persons are either qualified or in the process of attaining qualification by 1st October 2024.
  • Relevant persons are made aware of the requirement to get a qualification.
  • Credit Union policies are updated re MCC qualifications –payments, supports, etc.
  • A detailed budget is documented and approved.
  • F&P due diligence requirements for new in-situ CF roles.
  • Ensure individuals meet F&P requirements before confirming their CF status.
  • Ensure succession planning is sufficient taking account of all personnel who meet MCC and F&P requirements to cover all MCC roles, taking account of planned and unplanned leave, segregation of duties and conflicts of interest, etc.
  • Data Protection obligations need to be considered for new CF roles.
  • Credit unions should also review the legislation and guidance available from the CBI at: https://www.centralbank.ie/regulation/how-we-regul...

Contact us:

We have captured relevant information in a single document - click here to access.

For further information on the above, please contact:

  • Michelle O'Donoghue, Governance, Risk & Assurance Partner, (090) 6480800
  • Michael Reddington, Audit & Business Advisory Assistant Manager, (090) 6480600

Further Information