WOCCU Calls for ‘Proportionality’ in AML Rules; Adds 2 New Members

MADISON, Wis.–The World Council of Credit Unions is calling for “proportionality” in any new AML regulations, while also separately announcing it has added two new members. 

WOCCU called on the Financial Action Task Force to embrace proportionality in the application of anti-money laundering/countering the financing of terrorism (AML/CFT) regulations at the group’s Private Sector Consultative Forum, held at the United Nations Office on Drugs and Crime. FATF is the global standard setting body for AML/CFT rules and conducts periodic “mutual evaluations” of national-level AML/CFT supervision.

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Specifically, World Council said it urged FATF to provide clear guidance on the use of digital identities so responsibilities surrounding their use are clearly defined without imposing undue regulatory burden. Likewise, with respect to responsibilities such as determining the Beneficial Ownership of legal entities for “know-your-member” regulations, WOCCU urged FATF to encourage national-level regulators to use a tiered approach that distinguishes between lower-risk and higher-risk members. 

Reducing Burden

Such proportional tailoring could greatly reduce the regulatory burden for credit unions that typically serve less-complex legal entities, are smaller in size and have field-of-membership restrictions, WOCCU said.

“Credit unions and other financial cooperatives often report the costs and regulatory burdens associated with AML/CFT regulations are barriers to serving their members,” said Andrew Price, WOCCU regulatory counsel. “If well-structured and with proper proportional tailoring, the regulations should lend themselves to allowing credit unions to utilize new technologies—such as digital identities— to effectively serve marginalized and unbanked members without compromising the ability to combat money laundering and the financing of terrorism.”

2 New Organizations Join

Separately, joining WOCCU are the Croatian Association of Credit Unions (CACU) as direct member, and FINACUS Solutions—a credit union technology service organization from India—as an associate member.

Established in 2011, the Croatian Association of Credit Unions represents 12 credit unions with 44,000 members and US$87 million in assets.

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“Granting membership to the CACU allows World Council to add another credit union association from a European Union (EU) nation that has a strong desire to connect with the international network and participate in the European Network of Credit Unions,” said WOCCU President and CEO Brian Branch. “The Croatian Association of Credit Union’s inclusion in the ENCU will ensure the organization has an even stronger voice when educating EU policymakers on the services credit unions provide, and the economic and social role they play both in Europe and worldwide.”

FINACUS Solutions is a privately-owned business organization based in Mumbai, India that has been providing technology solutions for credit unions and cooperative banks since 2007. FINACUS provides technology solutions to credit unions in India, Nigeria, South Sudan, Ethiopia, South Africa, Bolivia, Paraguay and Mexico.

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