Control over the Activities of Credit Unions in the Light of the New Statute about Cooperative Savings and Credit Unions

Abstract

In light of the new law on cooperative saving credit unions some clarifications are needed. Concepts and features of credit unions and banks are delineated under the laws of Poland in this article. Banks as commercial organizations aim to maximize profits for the owners of deposits.Cooperative saving credit unions are considered as non-commercial non-for-profit organizations, and their activities are limited to providing access to cheaper credits and loans for people who can not get them in a bank due to the high cost of banking products. The authors identified the most important changes that the new law on cooperative saving credit unions brings to the sphere of monitoring the activities of credit unions. The new law directly affects mainly credit unions, but because of their growing systemic importance in the Polish market, the changes will affect all members of the national financial sector. According to the author, the new law has also fundamentally changed the way of banks functioning. The state control over the activities of credit unions which was introduced in the new law is ineffective.The authors supported the view that the corporate model of control that was functioning earlier worked well in practice, and therefore must be restored.