Per 1 January 2016, a new Dutch ‘light regime’ applies for credit unions that attract repayable funds not exceeding EUR 100 million and that have no more than 25,000 members.

In a nutshell, credit unions are cooperatives of which the members are admitted on the basis of their profession or business and which attract repayable funds from their members to extend loans to their members. As such, credit unions (may) conduct the business of a bank, which is a highly regulated activity in the EU.

The light regime contains several requirements that have to be complied with by the credit union, including, in respect of sound business operations, fit and properness of (supervisory) directors, and financial requirements, although the requirements are less extensive than those that apply to banks.

In addition, small credit unions are exempt from supervision, except for rules, such as the prospectus requirement and market abuse rules, if applicable. Small credit unions are credit unions that attract repayable funds for an amount not exceeding EUR 10 million. If a credit union would like to benefit from the exemption, it has to include a warning on its website, marketing material and other business documents that it is not required to have a license for its activities and that it is not subject to supervision of the Dutch Central Bank and the AFM.

The Dutch regime for credit unions anticipates a revision of CRD IV (Directive 2014/59/EU), that will exempt Dutch credit unions from the scope of the CRD IV. The European Commission already informed the Dutch Minister of Finance that it has no objections against such exemption, although it will take some time before such exemption can be realized.