EN ECB -PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 14  January 201 3 
on credit unions  
(CON/2013 /5) 
 
Introduction and legal basis  
On 6 November 2012, the European Central Bank (ECB) received a request from the Polish P arliament 
for an opinion on a draft law amending the  Law on credit unions and certain other laws (hereinafter the 
‘draft law’). On 6 December  2012, the ECB was reconsulted on a  revised  version of the draft law  
produced by the Parliament . This opinion considers the  revised version  of the draft law . 
The ECB’s  competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third and sixth indents of Article 2(1) of Council 
Decision  98/415/EC of 29 June 1998 on the consultation of the Europea n Central Bank by national 
authorities regarding draft legislative provisions1, as the draft law relates to Narodowy Bank Polski  
(NBP)  and to rules applicable to financial institutions insofar as they materially influence the stability of 
financial institu tions and markets. In accordance with the first sentence of Article 17.5 of the Rules of 
Procedure of the European Central Bank, the Governing Council has adopted this opinion.  
 
1.  Purpose of the draft law  
The draft law amends the Law of 5 November 2009 on credit unions2 (hereinafter the ‘Law on credit 
unions’) , which currently regulates the operation of credit unions active in Poland, and certain other laws , 
with a view to stabilising the credit unions system in the following areas:  
1.1 Deposit guarantees . The draft law establishes an obligatory deposit guarantee scheme cover ing 
deposits received by credit unions, formed as a sub -fund under the management of the Bank 
Guarantee Fund ( Bankowy Fundusz Gwarancyjny , BFG), which operat es the existing deposit 
guarantee scheme for banks (hereinafter the ‘credit unions sub -fund’). The credit unions sub- fund 
would be financed from mandatory annual contributions made by credit unions, with possible 
reliance on other sources of financing if the payout of guaranteed deposits is necessary, that are to 
be used in a pre -defined order and include a stabilisation fund for credit unions operated by the 
                                                 
1 OJ L 189, 3.7.1998, p. 42.  
2 Dziennik Ustaw  (Dz. U.) of 2 012, item 855.  
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2 National Credit Union , a statutory central association of individual credit unions3. To this end, the 
draft law inserts a new Chapter 4c in the  Law of  14 December  1994 on the Bank Guarantee Fund4 
(hereinafter the ‘Law on the B FG’). Chapter 4c mirrors, with necessary modifications, the rules 
applicable to the existing deposit guarantee scheme for banks as regards, inter alia , the coverage 
level and the payout procedures.  
1.2  Supervisory framework. Supervisory powers exercised by the Financial Supervision Authority 
(Komisja Nadzoru Finansowego, KNF) over cred it unions are enhanced by, inter alia , granting the 
KNF new supervisory to ols and clarifying the scope of information to be provided by credit unions 
to the KNF.  
1.3 Liquidity of  credit unions . The draft law regulates  more comprehensively  the credit unions’ 
obligation to maintain a ‘liquid reserve’ . The liquid reserve aims to pr eserve the credit unions’ 
liquidity  and is to be held by individual credit unions on separate accounts with the National Credit 
Union. Funds from the liquid reserve may be drawn on by the National Credit Union to grant ‘liquidity loans’ to individual credi t unions facing liquidity problems. At the same time, the draft 
law and the Law on credit unions provide for several forms of collaterali sed central bank liquidity 
assistance to be provided by NBP : (a) to the stabilisation fund ; (b) as direct loans to indi vidual 
credit unions, also against collateral in the form of State guarantee ; and (c) to the BFG for the 
operation of the credit unions sub- fund
5. 
1.4 Restructuring, reorganisation and insolvency . The draft law modifies the framework for the 
restructuring,  reorganisation, winding up and insolvency of credit unions. The following specific 
amendments are introduced:  
(a) In the Law of 28 February 2003 on bankruptcy and rehabilitation6, the existing insolvency 
regime for banks is extended to also cover credit unions.  
(b)  In the Law on credit unions, a number of restructuring instruments are introduced, to be implemented under the KNF’s supervision , with a view to more easily dividing, merging, 
taking over or liquidating individual credit union s, including with  the use of financial 
assistance granted from the stabilisation fund . 
(c) In the Law on the BFG, the BFG is entrusted with new tasks related to restructuring of credit unions, such as granting loans and guarantees to credit unions threatened by insolvency and  
acquiring claims of credit unions. This  financial support is to be financed from the credit 
unions sub- fund.  
                                                 
3 The existing stabilisation fund, operated by the National Credit Union , is designed to provide financial assistance to 
credit unions in financial difficulties. It is financed from annual contributions of individual credit unions, separate from 
annual contributions to the credit unions sub-fund. Under the proposed Article 38r(2) of the Law on the BFG and the 
proposed Article 55(1a) of the Law on credit unions, the resources of the stabilisation fund are transferred , if necessary,  
by the Nati onal Credit Union to the credit unions sub-fund and used for the payout of guaranteed deposits.  
4 Consolidated text published in Dz. U. of 2009 No 8,  item 711.  
5 See paragraphs 3.1  to 3.4 of this opinion.  
6 Consolidated text published in Dz. U. of 2012, i tem 1112.  
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3 1.5 Information sharing arrangements . The existing information sharing arrangements between the 
KNF, NBP and the BFG are extended to also cove r information relating to credit unions.  
 
2.  General observations  
2.1 The ECB was consulted on the existing Law on credit unions  in 2009, when this law was  at an 
early drafting stage7. In its opinion, the ECB especially recommended  the inclusion of credit  unions 
in NBP’s minimum reserves regime and in the scope  of the KNF’s financial supervision8. The ECB 
notes that these elements are now part of the credit unions’ regulatory framework . In particular, 
credit unions will be expected to hold minimum reserves with NBP through a central account 
maintained by NBP for the National Credit Union, from  18 months after  the publishing  of the Law 
on credit unions , i.e. from  27 January 2014. The ECB understands that the draft law aims to 
complement the existing legal pr ovisions in order to establish a comprehensive legal framework for 
credit unions in view of their rising importance in the  Polish  banking sector . This is to be done , in 
particular , by introducing more robust supervisory instruments, liquidity safeguards and 
restructuring tools. In this opinion, the ECB addresses th e elements introduced by the draft law , as 
well as other relevant aspects of the Law on credit unions that have changed compared to the draft 
law opined on by the ECB in 2009.  
2.2 Shortly before t he ECB was consulted on the draft law, another amendment to the Law on credit 
unions was adopted (hereinafter the ‘2012 amendment’)9. The ECB understands that the 2012 
amendment did not include any independent substantive provisions which would warrant an ECB opinion, and that its sole aim was to introduce in the Law on credit unions certain technical 
amendments required from a legislative perspective to reflect the impact on several of its 
provisions of the  long  time span between adoption and entry into force
10. 
 
3.  Specific observations  
 Liquidity support from NBP to the  National Credit Union  
3.1 Pursuant to the draft law, in the event of a threat to the liquidity of credit unions and where there is 
a risk that  funds held in the stabilisation fund may be exhausted, NBP may grant, against adequate 
collateral, a loan to the National Credit Union  with a view to increasing the  stabilisation fund . The 
                                                 
7 See Opinion CON/2009/60. All ECB opinions are published on the ECB ’s website at www.ecb.europa.eu.  
8 See paragraphs 2.5 and 2.7 of Opinion CON/2009/60.  
9 See the Law of 10 October 2012 amending the Law on credit unions (Dz. U. of 2012, item 1166).  
10 The Law on credit unions was adopted on 5 November 2009. On 30 November 2009,  the Polish President requested the 
Constitutional Court to review the Law’s compliance with the Constitution and on 12 January 2012 the Court passed its 
judgement (ref. K p 10/09). The Law on credit unions then had to be adapted: ( a) to incorporate the Court’s findings, 
which was achieved by resolution of the P olish Parliament of 28 June 2012; and ( b) to address certain  temporal issues 
which do not result directly from the Court’s judgement, which was  achieved by the 2012 amendment. Eventually, the 
Law on credit unions, as amended by the 2012 amendment, entered into force on 27 October 2012.  
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4 National Credit Union then provides financial support from the stabilisation fund to illiquid credit 
unions.  
3.1.1  The ECB has consistently stated in its c onvergence reports and its opinions that national legislation 
which provides for the financing by national central banks  (NCBs)  of credit institutions , other than 
in connection with central banking tasks, in par ticular to support insolvent credit or other financial 
institutions, is incompatible with the monetary financing prohibition11. The provision of liquidity in 
exceptional circumstances and on a case- by-case basis to temporarily illiquid but solvent credit 
institutions constitutes an inherent central bank task12. Solvency support to credit or other financial 
institutions is a State task however, and may not be assumed by a n NCB . 
3.1.2  Therefore, it should be ensured that liquidity support provided by NBP to the  National Credit 
Union with a view to increasing its stabilisation fund is temporary in nature  and may not be used to 
provide financial support to insolvent credit unions13. The ECB reiterates its recommendation to 
introduce  into Polish law  express safeguar ds in this respect, which should be applicable to all 
financial institutions receiving NBP’s liquidity support14.  
3.1.3  Following the entry into force of the draft law, two parallel legal bases will exist for the  granting of 
financial assistance by NBP to replenish the resources of the stabilisation fund: the existing, 
transitional Article 91(3) of the Law on credit unions and Article 43(2) of the Law of 29 August 
1997 on Narodowy Bank Polski15, as amended by the draft law . They  lay down similar but non-
identical criteria for granting assistance. The ECB recommends that the rules for granting NBP 
support to the stabilisation fund are clarified by defining the relationship between these two provisions or by deleting the transitional provision in Article 91(3) of the Law on credit unions. 
Liquidity support from NBP to individual credit unions  
3.2 Pursuant to Article 8(1) of the draft law, within the period of six months following the entry into 
force of the draft law,  if there is a threat to an individual credit  union’s liquidity , NBP may grant 
credit to it to replenish its financial resources.  
3.2.1  Pursuant to Article 8(2) of the draft law , such credit may be granted against the State guarantee 
provided for under the Law of 12 February 2009 on State support t o financial institutions  
(hereinafter the ‘Law on State support’)
16. The following criteria need to be satisfied to comply 
with the monetary financing prohibition where a State guarantee is used as collateral accepted by 
NBP for liquidity granted to individ ual credit unions : (a) it must  be ensured that the credit provided 
                                                 
11  See the ECB’s  Convergence Report 2012, p. 29.  The monetary financing prohibition in Article 123 of the Treaty is 
further clarified in Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application 
of prohibitions in Article 104 and 104b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1).  
12  See Opinion CON /2008/58, paragraph 4.1.  
13 e.g. by the grant ing of loans for the purposes of implementing rehabilitation proceedings pursuant to the proposed 
Article  38(6) and (8) of the Law on credit unions.  
14  See the ECB’s  Convergence Report 2012, p. 251,  paragraph 6.6 .4.  
15  Consolidated text published in Dz. U. of 2005 No 1, item 2. 
16 Dz. U. of 2009 No 39, item 308. 
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5 by NBP is as short term as possible; ( b) there must be systemic stability aspects at stake; ( c) there 
must be no doubt as to the legal validity and enforceability of the State guarantee under Polish law; 
and ( d) there must be no doubt as to the economic adequacy of the State guarantee, which should 
cover both principal and interest on the loans, thus fully preserving the financial independence of NBP
17. The ECB notes , in particular , that the economic adequacy criterion is not  currently  met, as 
Article 4(2) of the Law on State support only provides for State guarantees covering up to 50% of the outstanding credit amount . In addition the short -term nature criterion is also not currently  met 
as Article  8 of the draft law may  be interpreted as allowing longer -term credit , provided that it is 
granted within the period of six months following the entry into force  of the draft law . The ECB 
recommends that the draft law is amended to ensure compliance with these two criteria . 
3.2.2  Pursuant to Article 8(3) of the draft law, a limitation under  which funds obtained by a credit union 
may only be used t o remov e the risk of insolvency does not apply to NBP credit obtained under 
Article 8(1) of the draft law.  As the current formulation of this exemption may lead to diverging 
interpretations, the ECB recommends that the draft law expressly clarifies that financial support 
under Article 8(1) of the draft law cannot be used as a means of recapitalisation of insol vent credit 
unions.  
 Liquidity support from NBP to the BFG for the operation of the credit unions sub -fund 
3.3 Pursuant to the draft law, collaterali sed credit may also be granted by NBP to the BFG for the 
operation of the credit unions sub- fund i.e. to support  the payout of guaranteed deposits received by 
credit unions, where other sources of financing are exhausted and a threat to financial stability has arisen. The ECB understands that such credit may only be used in connection with the deposit  
guarantee  function of the credit unions sub- fund, and not in connection with its solvency support 
function
18. The ECB notes that : (a) such credit is equivalent to a similar liquidity support measure 
available from NBP to the BFG for the operation of the deposit guar antee scheme for banks ; and 
(b) the criteria  for granting both of these liquidity support measures by NBP are defined in a 
uniform manner in the Law on BFG and in the draft law. In this regard, reference is made to the 
ECB’s previous assessment , which conf irmed the compatibility of those criteria with the monetary 
financing prohibition19.  
 Information sharing  
3.4 The p roposed Article 80za of the Law on credit unions provides, inter alia , for the exchange of 
information on credit unions between NBP, the KNF and the  BFG. The ECB welcomes these 
provisions as they will enable the said entities to perform their statutory tasks with regard to credit 
unions, and facilitate the performance by NBP of its financial stability mandate.  
                                                 
17  See, for example , Opinion CON/2012/4, paragraph 5.  
18  See Opinion CON/2012/58 , paragraph 3.1.  
19 See Opinion CON/2012/58, paragraph 3.3 , where it was co nfirmed that NBP ’s financing of the BFG , as regards the 
operation of the deposit guarantee scheme for banks under the present Polish law, meets the requirements of being short -
term, addressing urgent situations where systemic stability aspects are at stake and of being at the NCB’s discretion (s ee 
the ECB’s  Convergence Report 2012, p. 30) . 
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6 3.5 Legislative consistency  
 In the interests  of legislative consistency , the proposed Chapter 3a of the Law on the BFG needs to 
be reconciled with parallel amendments to that Law proposed by another recent legislative 
initiative establishing a stabilisation fund for credit institutions on which the ECB produced a 
separate opinion20. 
 
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main, 14 January 2013.  
 
[signed]   
The Vice -President of the ECB  
Vítor CONSTÂNCIO  
                                                 
20 See the Chapter 3a proposed in the draft law amending the Law on the Bank Guarantee Fund and certain other laws, 
discussed  in Opinion CON/2012/91.