C R E D I T U N I O N Y E A R E N D R E Q U I R E M E N T S

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1 C R E D I T U N I O N Y E A R E N D R E Q U I R E M E N T S 2009 NORTHERN I R E L A N D Note: The Year End Requirements document is based on the Credit Union (Northern Ireland) Order, 1985 (as amended) and the Standard Rules for Credit Unions (Northern Ireland) [Version 07.07] Issued by Irish League of Credit Unions August

2 CONTENTS SECTION MATTER (1) RESOLUTION NO. 49 of 2003 (Res. 49/03) - Loan arrears provision. (2) BAD DEBT WRITE OFF. (3) RESCHEDULING OF LOANS. (4) GENERAL RESERVE - Resolution No. 41 Amendment of (5) DEREGULATION. (6) PAYMENT OF DIVIDENDS/INTEREST REBATE. (7) RULE AMENDMENTS. (8) ANNUAL GENERAL MEETING OF THE CREDIT UNION. (9) ANNUAL RETURN - AR 25. (10) ELECTIONS AND ELECTORAL PROCEDURES. (11) DECLARATION OF SECRECY. (12) AUDITOR. (13) STATEMENT OF AUDITING STANDARDS AND DIRECTORS STATEMENT. (14) FINANCIAL REPORTING STANDARD NO. 8 (FRS 8) Related Party Disclosures (15) LEAGUE AFFILIATION FEES. (16) INFORMATION & COMMUNICATION TECHNOLOGY (17) NATIONAL ADVERTISING CAMPAIGN (18) ILCU INTERNATIONAL DEVELOPMENT FOUNDATION LIMITED. (19) DEATH BENEFIT INSURANCE. (20) RETURNS TO LEAGUE OFFICE. (21) ORDER OF BUSINESS AT AGM. (22) MONEY LAUNDERING REGULATIONS (23) REMUNERATION. (24) WORKPLACE (HEALTH, SAFETY and WELFARE) REGULATIONS (NI) 1993 (25) NOTIFICATION TO CHAPTER OF ELECTION AND APPOINTMENTS 2009/2010. (26) MONITORING SYSTEM - PRUDENTIAL RETURN. (27) DATA PROTECTION Enclosures with Year End Requirements Reminder to Register Rule Amendments (Section 7) - Notification of Rule Amendments arising from League AGM 2009 (Section 7) - Model Standing Orders for AGM (Section 8) - Model Nomination Forms (Sections 8) - Return of Officers and Auditors Form 2009/2010 (Section 8) - Sample Ballot Paper (Section 10) - Notification to Chapter of Election and Appointments 2009/2010 (Section 25) - ILCU International Development Foundation Contribution Advice Form Issued by: Irish League of Credit Unions, 33-41, Lr. Mount Street, Dublin 2. Tel Fax info@creditunion.ie Web: 2

3 (1) RESOLUTION NO. 49 of BDM 2003 (Res. 49/03) That this Biennial Delegate Meeting, to conform with best international standards and practices, decides that for the purpose of the Savings Protection Scheme, delinquency shall be measured by reference to the arrears of repayment of principal under the loan agreement. This Biennial Delegate Meeting further agrees that loan arrears calculated as above shall be categorised and provision made by reference to the net loan balance in respect of each category as follows: Category: Provisions: 0-9 weeks 0% of net loans balances weeks 10% of net loan balances weeks 20% of net loan balances weeks 40% of net loan balances weeks 60% of net loan balances 53 weeks and over 100% of net loan balances Resolution 49/03 came into effect on the 1 st October 2004 and must be fully applied in respect of credit union year end 30 th September Resolution No. 11 of 1987 and all amendments to it including Resolution No. 23 of 2002 no longer apply. Where it is considered prudent to do so, an additional provision over and above that required by Resolution 49 should be made. The ILCU has released a new Resolution 49 standard to be implemented by all ILCU affiliated credit unions by the 1 st February Information on the new standard has been circulated to credit unions, and is available on the ILCU website. This new Resolution 49 standardises provisioning in relation to non standard lending, such as lump sum loans, multiple loans and guarantor loans. Reporting and audit trails are also improved in this new Resolution 49 standard. Credit unions are advised that it is extremely important to recognise that loan delinquency is a risk arising from the granting of loans and that adequate provision must be made for loans which are not performing in accordance with the promissory note. Accounting Procedures Provisions made under the terms of Resolution No. 49 of 2003 should be treated through the income and expenditure account. The gross total loan balance outstanding should be shown on the balance sheet with the provision amount set against it. (2) BAD DEBT WRITE OFF The Irish League of Credit Unions is placing a greater focus on Loan Delinquency in credit unions. In the last year some credit unions have been contacted by the League s Monitoring Department in relation to Loan Delinquency levels. This will be an ongoing process and further contacts will be made as part of the effort to improve results in this area across the movement. Loan Delinquency has become an even more vital component in the process of monitoring of credit unions, and also for scheduling of credit union visits by League staff. With this focus on Loan Delinquency in mind, and in accordance with prudent management and the binding decision of the Special General Meeting of the Irish League of Credit Unions held in Bundoran in 1977, all credit unions are required to write off in the year end accounts all loans which are considered irrecoverable. Res 24 of Annual General Meeting 2002 amended the decision to read as follows: "A loan, other than a single payment loan, on which no due payment on foot of principal has been received during the 12 month period immediately preceding the year end account date, shall be deemed to be a bad debt. Loans upon which the credit union has collateral, by way of a solicitor s undertaking to discharge the loan, shall be excluded from this provision. 3

4 After utilising any existing reserves or provisions set aside for that purpose, all such bad debts must be written off against income at year end accounting. A single payment loan shall be deemed to be a bad debt and treated as indicated in the preceding paragraph when such loan has not been liquidated within a period of three months after due date, unless an extension has been negotiated. For the purposes of this resolution, a transfer of shares, leaving the same net indebtedness to the credit union after such transfer has been made shall not constitute a payment on principal." Regulations have recently been published which will take effect from the 1 st September 2009 which provides that a Solicitor shall not give an undertaking with respect to a secured loan of an underlying property in which he/she (or a connected person) has an interest in without advising the financial institution of that interest and the financial institution acknowledging that interest and consenting to the Solicitor providing the undertaking. Each board should satisfy itself that it is prudent to apply the exclusion in respect of a loan on which no due payment has been received in the 12 months and for which a Solicitor s undertaking exists. A loan which is deemed irrecoverable, in the opinion of the board, prior to 12 months having elapsed since last due payment of principal being received, should also be considered for write-off by the board. The decision should be based on the board s opinion on the status of the loan, rather than simply the length of time the loan is in arrears. Once a loan has been identified as being irrecoverable/uncollectable then the loan should be written off immediately. A credit union should not necessarily wait until the loan is 100% provided for in Res. 49. The board should review non performing loans at regular intervals with a view to writing them off. The credit control report presented to the monthly board meeting should include a cumulative report of loans written off. Written off loans should be retained on the computer, but should not form part of the live loans on the computer system. Should the computer system not facilitate the recording of written off loans then written off loans should be recorded in a separate manual ledger. Written off loans should be reviewed regularly. A member whose loan has been written off remains indebted to the credit union and making a write off decision does not interfere with the credit unions ability to collect the loan in the future. (3) RESCHEDULING OF LOANS Resolution 21 of 1994 states "That this AGM resolves that for the purpose of compliance with the Savings Protection Scheme requirements, a register of all rescheduled loans shall be maintained by the credit union". This Resolution was approved at League AGM in an effort to deal with the question of "Cosmetic accounting" relating to loan arrears. The vast majority of credit unions have adopted a responsible attitude in the operation of Resolution No. 49/03 which categorises contractual loan arrears and calculates provision requirements accordingly. Frequent or unauthorised rescheduling of loans misrepresents the true arrears situation and thereby improperly reduces the provision requirements. In accordance with Resolution 21 of 1994 the League developed a Register of Loan Repayments Amendments. This Register should be used to record the information each time a loan repayment is changed by way of a reduction in the repayment amount or when other repayment amendments are authorised. Loan rescheduling is a means of helping members who find themselves in difficulty. Loan rescheduling must never be used to purposely conceal loans delinquency and must only be done at the member s request. Re-scheduled loans are similar to new loan applications, except that no additional funds are being loaned. A new loan application and promissory note should be issued for all reschedules, even where the arrangement is intended to be temporary. Where a loan is guaranteed, the guarantor must also sign the guarantor section on the new promissory note. The credit union policy on rescheduled loans should specify who has the authority to grant reschedules. The officers granting the reschedule should satisfy themselves that they have sufficient new and verified information from the member that will allow the member to keep to the new agreement. The credit union will also need to make a 4

5 judgment in each rescheduled case as to the level of bad debt provision required for each loan. At a minimum, the existing provision should be retained until the credit union is satisfied that the member can keep to the new arrangement. All rescheduled loans must be recorded in the rescheduled loan book. Re-scheduled loans should be specially monitored for default. An immediate and advanced level of credit control action must take place when a rescheduled loan defaults and the level of provisioning should be reviewed. (4) GENERAL RESERVES Credit Unions (Northern Ireland) Order 1985 (as amended) requirement Article 36 of the Credit Unions (Northern Ireland) Order 1985 (as amended) requires that at least 20% of any surplus resulting from the operations of the credit union during a year of account shall be transferred to a general reserve until such time as it is equal to at least 10% of the total assets of the credit union and thereafter such sum shall be transferred to (or from) that reserve as is necessary to maintain it at not less than 10% nor more than 20% of the total assets. For the purpose of determining at year end 2009 how much surplus is to be transferred the total assets figure is arrived at by subtracting the existing General Reserve (prior to any distribution of surplus year end ) from the 2009 year end total assets figure. Please see the statutory Credit Union Annual Return (AR 25) balance sheet format for total assets/liabilities. (5) DEREGULATION The attention of all credit unions is drawn to Article 3 of the Deregulation Order Northern Ireland Deregulation Guidance Notes and Management and Systems Guidance Notes were also issued by the Registrar. The latter Notes may be seen as a model of best practice to which all credit unions aspire. Credit unions are reminded that among the requirements to take advantage of the increased lending limit, they must have a General Reserve which is not less than 10% of the total assets, as well as an adequate system of management and control and a Certificate of Approval from the Registrar. (6) PAYMENT OF DIVIDENDS At this year end credit union boards are again asked to consider carefully the dividend percentage to be recommended to the Annual General Meeting for approval. The priority in every credit union should be to ensure and maintain the underlying financial stability of the credit union by writing off bad debts, making adequate provisions for loan arrears and allocating sufficient surplus to reserves. Credit union legislation and prudent practice requires this. There is no binding requirement on the board of any credit union to progressively increase the dividend or even maintain it at the same level as previous years. Prior to finalising the audited year end accounts, each board should decide on the allocation to reserves and the amount that is to be recommended for distribution to the members by way of dividend. Dividend due to any member may be placed to the credit of the member s share balance. ACCOUNTING FOR DIVIDENDS Credit unions should comply with FRS 21 "Events after the balance sheet date. Under this standard, dividends will be recognised when a liability to pay the dividend is created. This will mean:- Interim dividends are accounted for when paid. As a matter of law, interim dividends do not become a legal liability until they are paid. This is because they are at the discretion of the directors; it is open to the directors to reverse a decision to pay a dividend at any time up to the date of payment; Final dividends are accounted for as a liability when they are approved by the members in general meeting. This will mean that the dividends recommended by credit unions to be paid following the AGM are no longer to be reflected as a liability in the financial statements of the credit union until such time as they are approved at the AGM. 5

6 There will be a need to disclose the amount of the dividends recommended or approved after the balance sheet date and before the financial statements are approved by the Board. PAYMENT OF INTEREST REBATE Careful deliberation should take place as to the relevant merits of paying an interest rebate or reducing the interest rates(s) and if the board of the credit union considers it appropriate a rebate of interest may be recommended to the Annual General Meeting for payment to borrowing members. In this regard the board's attention is drawn to Standard Rules 136 and 137. Note In order to support the various arguments in favour of the mutuality principle particularly relating to maintaining a favourable taxation regime for the credit union movement the word 'profit' should not be used in any documentation of the credit union but substituted with the word 'surplus'. Please note that the same accounting treatment applies to the interest rebate as to the final dividend. (7) RULE AMENDMENTS Arising from AGM 2009, rule amendments are required for consideration at the credit union s AGM in respect of the following: Standard Rules: Rule 155(2), Rule 155(4), Rule 163 and Rule 180 See attached for details of these rule amendments. (8) ANNUAL GENERAL MEETING OF THE CREDIT UNION (a) Notice to Members and to the Auditor The Annual General Meeting must be held not later than 31st January 2010 as per Standard Rule 56. For a valid meeting to be held it is essential that each member and the auditor be given proper written notice and written notice must also be displayed in the public office or public offices of the credit union as required by Standard Rule 57(1). However, it is not sufficient to advertise the meeting in the press or only to display notices in the credit union office(s) or elsewhere. As a matter of best practice, boards should include with the notice of the meeting the Year End Accounts together with Annual Report to all members. Additionally, it is recommended that each member receives a detailed statement of account with the notice of the AGM. This statement should show all transactions on the member's account since the previous year end. This is particularly important for credit unions which do not normally send out statements to their members. (b) Notice to the League (League Rules Section 14 Rule 9) Each affiliated credit union must cause notice of its general meetings, at which the League shall have the right to be represented and heard, to be given to the League at the same time as it gives notice of the meeting to its members. Each credit union, in accordance with Standard Rule 55, shall notify the League and the Registrar of the names and addresses of all persons elected or appointed to office within 14 days of any general meeting and of any meeting of its board of directors at which elections or appointments to office take place. The "Return of Officers and Auditor 2009/2010" Form is enclosed with this Year End Circular. (c) Standing Orders Model Standing Orders for the credit union AGM and general meetings are enclosed with this Year End Circular. These should be circulated to members with the notice of meeting. Credit Unions should present these for adoption as item (b) on the Order of Business for AGM (see Section 21 of this circular). 6

7 (d) Nominating Procedure Credit unions are obliged to set out the nominating procedure for their AGM in their notice of meeting (Standard Rule 57). The League has designed a sample Nomination Form for credit unions which is enclosed with this Year End Circular. The nominating procedure is set out in the Notes on the Form (see also Standard Rules 73, 74 and 75). The sample enclosed is for elections to the board of directors and supervisory committee. Members may also submit nominations for election of auditor (in which case a similar form may be used). The board may put forward the name of the existing auditor for re-appointment which must be voted on at the meeting in accordance with Rule 65. The League recommends that all nomination forms should be circulated to all members with the notice of meeting. (e) Quorum An AGM can only proceed when a quorum is present. Each credit union should ensure the attendance of a valid quorum. (9) ANNUAL RETURN - AR 25 League Rules, Section 14, Rule 10 (1) requires that:- "A copy of members accounts and auditor's report laid before its last annual general meeting and a copy of its appropriate return to the Registrar of Credit Unions for the Republic of Ireland or to the Registrar of Credit Unions for Northern Ireland as the case may be, shall be sent to the League not later than 31st day of March in each year." Copies of the Annual Return - AR 25 are issued by the Registrar to all credit unions. It must be fully completed and signed by the auditor. Accompanied by the Year End Accounts as presented to the AGM, one copy should be sent to the Registrar and one to League Office not later than one month after the credit union's Annual General Meeting and before the 31st March in each year. Also credit unions should seek a PDF copy of the accounts while being type set/run off by the Printers for submission to the League Office and a copy for their own records. The responsibility for completing Form AR 25 rests with the relevant officers of the credit union. Auditors complete and sign their opinion regarding certain aspects of the Annual Return. The AR 25 is a vital element in the Savings Protection Scheme computer monitoring and all boards of directors and auditors are asked to ensure its prompt submission to League Office. Where possible it would be appreciated if the AR form could be typed as opposed to hand written. Credit unions are requested to send to the League Office the audited year end accounts as soon as they become available. Credit Unions are reminded of their obligations under the Money Laundering Regulations 2007 and are required to report the appointment of a Money Laundering Reporting Officer on the AR 25. (10) ELECTIONS AND ELECTORAL PROCEDURES (a) Elections at AGM Please refer to Sections 9 and 10 of the Standard Rules for Credit Union (Northern Ireland) Electoral procedures are dealt with in more detail in (b) below. For this section, credit unions should note that all elections must be by secret ballot. There will be elections for the board, supervisory committee and auditor at every annual general meeting [see Rule 61 (q) to (s) inclusive]. Every member shall have one vote irrespective of his/her shareholding and cannot have more than one vote except for the Chairman of the meeting in the limited circumstances set out in Rule 58. 7

8 (b) (i) (ii) Election Procedures The League has issued model nomination forms, and the Notes on the form should be read by credit unions as to the proper procedure for nominations. Rules 73, 74 and 75 also refer. All elections are by majority vote. Majority Vote is regarded as:- "the number by which, in voting, the votes cast on one side exceed those cast on the other" - i.e. the greater number of votes cast, that is, a simple majority. It does not mean more than half of the votes cast, and is those members present and voting at the AGM. Proxy voting is not allowed under the Northern Ireland Rules (Rule 76). (iii) A sample Ballot Paper is furnished with this Year End Circular. We suggest that separate Ballot Papers should be distributed to members at the AGM for the elections to the board, supervisory committee and auditor. A vote is "secret" to the voter i.e. how a member cast his/her vote should not be seen by anyone. With reference to the sample Ballot Paper enclosed, members voting at their forthcoming credit union AGM should vote by placing a tick at the name of the candidate or candidates of their choice, on the Ballot Paper. Members may vote for any number of candidates up to the maximum number of vacancies applicable. Note however, that for example, if 4 vacancies exist and a voting member casts more than 4 votes on the Ballot Paper (by ticking more than 4 names) that Ballot Paper would be regarded as a "spoiled vote". Those candidates receiving the highest number of votes cast are elected. There is no quota required, as would be the case in a system based on proportional representation. (iv) Electoral procedures in summary, under existing law therefore are as follows: (1) elections by secret ballot (2) elections by "majority vote (explained above) (3) use of nomination forms and ballot papers as per models enclosed. Note that nominations from the floor are not allowed. (4) where there are more candidates than vacancies, those with the greater number of votes cast are elected. (5) where there is an equal number of candidates for an equal number of vacancies, under existing rules, a secret ballot must still be held. (19) where there is only one candidate for an election, under existing Rules, a secret ballot must still be held. (20) where there is a tie in an election held by secret ballot it is recommended that up to 2 further secret ballots be taken, and if this does not determine the issue, that the matter be decided by lot. (c) Election of Officers Election of Officers following the AGM - Standard Rule 66. In this context "officers" means president, vice-president, treasurer and secretary each of whom, along with the credit committee, must be elected/appointed within the period of 7 days beginning on the day following the AGM. (d) Election of Auditor Credit Unions are reminded that the auditor has a right to be re-appointed under Rule 65 unless one of the circumstances set out in (a), (b), (c) or (d) of that Rule exists. 8

9 To be eligible for appointment as an auditor, a person must be: (a) a member of a recognised supervisory body; and (b) eligible for the appointment under the rules of that body. An individual or a firm may be appointed as a credit union Auditor. (11) DECLARATION OF SECRECY All directors, members of committees, employees, voluntary staff and other persons with access to members' records or any other records of the credit union, should complete the Declaration of Secrecy each year. The signing should be completed immediately on election/appointment or as soon as is practicable thereafter - Standard Rules 54 (8), 66(9) and 163 refer. (12) AUDITOR (a) Copy of Year End Requirements 2009 While a copy of this circular has been sent to each auditor who signed the credit union's AR for last year, the board of directors should ensure that his/her attention is again drawn to this circular. Where a credit union has appointed a new auditor, he/she should be given a copy of this circular and be advised to contact League office should he/she require any clarification on its content. Any credit union/auditor seeking clarification on any of the points mentioned should contact League Office. (b) Management Letter/Letter of Weakness Where the auditor reports to the board of directors by way of a "Management Letter" or "Letter of Weakness" a copy of this report and any related correspondence should be attached to the AR 25/Annual Accounts and forwarded to League office. Such a report may arise out of the audit where it is found that there exists:- - weaknesses in the structure of the accounting systems and internal controls; - deficiencies in the operation of the accounting systems and internal controls; - inappropriate accounting policies and practices; The Savings Protection Scheme Administration Committee will be most anxious to be made aware of such a report and will be available to assist a credit union implement any recommendations arising from the report. (c) Technical Guidance The Practice Note The Audit of Credit Unions in the United Kingdom (PN 27) was issued by the Auditing Practices Board in January (d) Audit Procedures. The latest version of the Audit Procedures CD will be issued shortly. 9

10 (13) STATEMENT OF AUDITING STANDARDS & DIRECTORS STATEMENT Report of Directors and form of Auditor's Report Credit unions should note that the annual audit of a credit union should be conducted in accordance with International Standards on Auditing (UK and Ireland) as issued by the Auditing Practices Board (APB). Auditor s Report The standard (unqualified) statement of opinion on the credit union that should be given by the auditor is set out below. Independent Auditor s Report to the members of XYZ Credit Union Limited I/We have audited the financial statements of (name of credit union) for the year ended 30 September which comprise [specify the primary financial statements such as the income and expenditure account, appropriation account, the statement of general reserve, the balance sheet] and the related notes. These financial statements have been prepared under the accounting policies set out therein. Respective responsibilities of Directors and Auditors The directors responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and the United Kingdom Accounting Standards (UK Generally Accepted Accounting Practice) are set out in the Statement of Directors Responsibilities. My/Our responsibility, as independent auditor, is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). I/We report to you my/our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with UK Generally Accepted Accounting Practice in Ireland and the Credit Unions (Northern Ireland) Order I/We also report to you if, in my/our opinion, a satisfactory system of control over transactions has not been maintained, or if proper books of account have not been kept by the credit union. In addition, I/we state if I/we have not obtained all the information and explanations necessary for the purposes of my/our audit or if the credit union s balance sheet and its revenue account are not in agreement with the books of account. I/We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. I/We consider the implications for my/our report if I/we become aware of any apparent misstatements or material inconsistencies with the financial statements. My/Our responsibilities do not extend to any other information. Basis of Opinion I/We conducted my/our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the credit union's circumstances, consistently applied and adequately disclosed. I/We planned and performed my/our audit so as to obtain all the information and explanations which I/we considered necessary in order to provide me/us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming my/our opinion I/we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In my/our opinion the financial statements give a true and fair view of the state of the credit union's affairs as at 30 September.. and of its income and expenditure for the year then ended, and have been properly prepared in accordance with UK Generally Accepted Accounting Practice and with the Credit Unions (Northern Ireland) Order

11 Registered Auditor: Address: Date: Statement of Directors' Responsibilities The Directors' Report containing a Statement of Directors' Responsibilities should be included in the Annual Report to members. An appropriate wording for a Statement of Directors Responsibilities is as set out below. "The Credit Unions (Northern Ireland) Order 1985 (as amended), requires directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the credit union and of the income and expenditure of the credit union for that period. In preparing those financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the credit union will continue in business. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy the financial position of the credit union and which enables them to ensure that the financial statements comply with the Credit Unions (Northern Ireland) Order 1985, and any amendments thereto. They are also responsible for safeguarding the assets of the credit union and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities." Boards of directors should discuss this Statement with their credit union auditor, in relation to the audit and the preparation of the Statement for the Annual Report. Directors with queries may also contact League Office. (14) FINANCIAL REPORTING STANDARD No. 8 - (FRS8) in relation to related party disclosures is effective with regard to credit unions. Boards are requested to familiarise themselves with the Standard and make appropriate disclosures in the credit union's accounts, if necessary. (15) LEAGUE AFFILIATION FEES 2010 and 2011 RESOLUTION No. 3 AGM 2009 That this Annual General Meeting sets the affiliation fee payable to the Irish League of Credit Unions by each member of the League for the calendar years 2010 and 2011 at the rate of 0.90/ 0.54 per member over 16 years plus 0.25/ 0.25 per 1000/ 1000 of the total assets of the credit union, subject to a cap of 60,000/ 36,000; membership and assets to be as reported in the statutory Annual Return 2007; that the contribution payable to the League Savings Protection Scheme by each member of the League for the calendar years 2010 and 2011 will be at the rate of 0.58/ 0.58 per 1000/ 1000 of the total assets of the credit union; assets to be as reported in the statutory Annual Return 2007; the affiliation fee and contribution to the Savings Protection Scheme to be paid half yearly; payment to be received not later than 31 January in respect of the half January to June, 31 July in respect of the half July to December. 11

12 The League Board will send an invoice on 1 st January 2010 to credit unions for the Affiliation Fee and Savings Protection Scheme Fund contribution for the first half of A further invoice will be sent to credit unions on 1 st July for the second half of the year. Where all or part of these fees are to be deducted from members savings it is necessary that this information be provided with the Notice of the AGM and AGM approval obtained. (16) INFORMATION AND COMMUNICATION TECHNOLOGY Resolution No. 28 passed at the Biennial Delegate Meeting held in Belfast on the 28th/29 th April 2007 That this Biennial Delegate Meeting endorses the Information and Communication Technology Strategy (ICTS) proposed by the National Technology Committee, approved by the League Board, presented to the meeting (and circulated to each member credit union in advance) and, in accordance with Section 10, Rule 4, of the Rules of the Irish League of Credit Unions, this Biennial Delegate Meeting authorises the collection of the requisite 4 million funding over four years required for the implementation of the ICTS by means of the billing of member credit unions by the League in January 2008, January 2009, January 2010 and January The amount owing from an individual credit union is to be 0.10/ 0.10 per 1000/ 1000 of the total assets of the credit union; total assets to be as reported in the statutory Annual Return of In line with the above Resolution the League Board will send an invoice in January 2010 and each relevant year thereafter to credit unions. (17) NATIONAL ADVERTISING CAMPAIGN Resolution No. 20 AGM 2009 That this Annual General Meeting, in accordance with Section 10, Rule 4, of the Rules of the Irish League of Credit Unions, authorises collection of the requisite funding of 2 million for the National Advertising Campaign over two years by means of the billing of member credit unions by the League in January 2010 and January Amount owing from an individual credit union to be 0.10/ 0.10 per 1000/ 1000 of the total assets of the credit union; total assets to be as reported in the statutory Annual Return of In line with the above Resolution the League Board will send an invoice in January 2010 and (18) ILCU INTERNATIONAL DEVELOPMENT FOUNDATION LIMITED The Foundation wishes to express its appreciation to all credit unions which support its international credit union development work by making the annual contribution. Credit unions which do not make a regular contribution are asked to please consider doing so. Credit unions are reminded that the making of Donations out of the funds of the credit union must have the prior approval of AGM (Standard Rule 169). Standard Rule 133 (c) states that distribution of surplus for any social, cultural or other purpose shall not exceed 10% of the year's surplus remaining after any transfer to or from the general reserve. Also see Article 36 (5) The Credit Unions (Northern Ireland) Order 1985 (as amended). Where the contribution to the ILCU International Development Foundation Limited is made out of the funds of the credit union, the requirements of the above rules should be complied with. Cheques should be made payable to:- ILCU INTERNATIONAL DEVELOPMENT FOUNDATION (19) DEATH BENEFIT INSURANCE It is recommended that where premiums for DBI are deducted from members savings, care should be taken to follow the procedures advised by the League 12

13 (20) RETURNS TO LEAGUE OFFICE. During the course of the year it may be necessary to ask credit unions to complete questionnaires or respond to other requests for information. The co-operation of credit unions is greatly appreciated in achieving a prompt return of the information sought. (21) ORDER OF BUSINESS AT ANNUAL GENERAL MEETING Rule 61. The order of business at annual general meetings of the members shall be: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) (q) (r) (s) (t) (u) (v) ascertainment that a quorum is present; * adoption of standing orders; reading and approval of the minutes of the last annual general meeting and of any intervening special general meeting; report of directors; report of the treasurer and consideration of accounts; report of the auditor; declaration of dividend and rebate of interest (if any); report of the credit committee; report of the supervisory committee; report of the credit control committee; report of membership committee or membership officer; report of planning and development committee; report of education committee; report of any sub-committee; report of nominating committee; appointment of tellers; election of auditor; election of directors; election of supervisors; any other business; announcement of election results; adjournment or close of meeting. The members assembled at any annual general meeting may suspend the order of business upon a majority of not less than two-thirds of the members present at the meeting. *see Model Standing Orders enclosed. (22) MONEY LAUNDERING REGULATIONS 2007 Credit unions are reminded of their obligations under the Proceeds of Crime Act 2002, Money Laundering Regulations 2007 and should ensure that the following are implemented: Internal controls and communication of policies. Identification procedures Adequate record keeping Recognition of suspicious transactions and report procedures Education and Training of relevant staff. Reporting requirements. (23) REMUNERATION Reference Rule 162: (1) Subject to paragraph (2) an officer of the credit union shall not be paid by the credit union any remuneration, whether directly or indirectly, for any service performed by him in his capacity as such officer on behalf of or for the benefit of the credit union other than expenses 13

14 necessarily incurred by him in such capacity in carrying out any duties in respect of the business of the credit union and approved by a majority vote of the members of the board of directors. (2) The treasurer and any assistant treasurer may receive such honoraria as may from time to time be approved, prior to the payment of such remuneration or any part thereof, by the members in general meeting subject to Rule 89 (i). Credit unions are reminded that where an honorarium is paid to the Treasurer/Assistant Treasurer they are required to deduct tax (24) WORKPLACE (HEALTH, SAFETY and WELFARE) REGULATIONS (NI) 1993 All organisations with employees, including credit unions, are obliged to comply with the requirements of the above Regulations. Further information can be obtained from the Health & Safety Executive for Northern Ireland (25) NOTIFICATION TO CHAPTER OF ELECTION AND APPOINTMENTS 2009/2010. Following the AGM credit unions should complete the attached Notification to Chapter of Elections and Appointments and return directly to the Secretary of the Chapter. (26) MONITORING SYSTEM PRUDENTIAL RETURN The Prudential Return provides the ILCU s Monitoring Department with all the data required to calculate the PEARLS ratios, growth trends, etc. and to produce the quarterly Financial Performance Reports for credit unions. Guidance notes for completion of the Prudential Return are available on the ILCU website, in the Monitoring Section. Be advised that the League still requires Prudential Return data on a quarterly basis. Note the year end Annual Return does not replace the September Prudential Return. (27) DATA PROTECTION The application for membership and loan application forms issued by the League contains a standard section entitled Consent to Use and Disclosure/Data Protection Act, Credit unions are strongly advised to use these forms and to ensure that they obtain, to the greatest extent possible, the member s signature on this section of the form in order to allow the credit union to use and disclose the member s personal data in the circumstances set out on the form and in accordance with the applicable legislation. Issued: August