EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 10 November  2022  
on building societies   
(CON/20 22/38) 
 
Introduction and legal basis  
On 21 July 2022 the European Central Bank (ECB) received a request from the Marshal of the Polish 
Parliament for an opinion on a draft l aw on building societies  (hereinafter 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 sixth indent of Article  2(1) of Council Decision 98/415/EC1, as 
the draft law contains rules applicable to financial institutions insofar as they materially influence the stability 
of financial institutions and markets . In accordance with the first sentence of Article 17.5 of the Rules of 
Procedure of the European Central Bank, the Governing Counc il has adopted this opinion.  
 
1. Purpose of the draft law  
1.1 The draft law provides a legal framework for the establishment and operation of building societies 
(kasy oszczędnościowo -budowlane)  in Poland , enabling them to operate in one of  two different legal 
forms2, either as (i) banks3 in the form of joint -stock companies  to which the provisions of the Polish Law  
on banking4 would apply , to the extent not regulated in the draft law ; or (ii) cooperatives5 to which the 
provisions of the Polish Law  on cooperatives6 would apply , to the extent not regulated in the draft law .  
1.2 As noted in the explanatory memorandum, t he draft law represents an attempt to re- establish the 
system of building societies that  was first introduced in Polish l aw in 19977 but was never put into practice.  
 
1  Council Decision 98/415/EC of 29  June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions ( OJ L 189, 3.7.1998, p. 42). 
2  Article 2(1) of the draft law.   
3  Banks do not include credit unions.  The term ‘credit institutions’, under Polish law, only refer s to credit institutions 
registered in Member States of the European Economic Area (EEA) other than Poland. Non -EEA credit institutions 
are referred to under Polish law as ‘foreign banks’ (Article 2,  Article 4(3) and Article 4(1)(17) to (20) of the Law of 
29 August 1997 on banking  (Ustawa z dnia 29 sierpnia 1997 r. –  Prawo bankowe , consolidated text: Dziennik Ustaw 
z 2021 r., poz. 2439 )).  
4  Law of 29 August 1997 on banking (Ustawa z dnia 29 sierpnia 1997 r.  – Prawo bankowe (consolidated text: Dziennik 
Ustaw z 2021 r., poz. 2439 )). 
5  Pursuant to the definition  contained in Article 1(1) of the Law on cooper atives, a cooperative is a voluntary association 
comprising  an unlimited number of persons, with variable membership and variable share fund, which conducts joint 
economic activity in the interests of its members.  
6  Law of 16 September 1982 on cooperatives  (Ustawa z dnia 16 września 1982 r. Prawo spółdzielcze  (consolidated 
text: Dziennik Ustaw z 2021 r., poz. 648 )). 
7  See the Law of 5 June 1997 on building societies  and State support for home savings schemes ( Ustawa z dnia 
5 czerwca 1997 r. o kasach oszczędnościowo- budowlanych i wspieraniu przez państwo oszczędzania na cele 
mieszkaniowe ( Dziennik Ustaw z 1997  r., Nr 85, poz. 538)), repealed on 1 January 2002.   
ECB -PUBLIC  
2 The legal framework for the operation of building societies is based on similar solutions already in place in 
other Member States8. 
1.3 The draft law requires building societies  to operate on the basis of an authori sation granted by 
Komisja Nadzoru Finansowego (KNF, Polish Financial Supervision  Authority ), which would also supervise 
building societies9. The draft law specifies the conditions for obtaining such  authori sation . These includ e, 
inter alia,  possession of  share capital or own funds in an amount not lower than the Polish zloty (PLN) 
equivalent of EUR 5 million, and adoption, in order to define the basic principles of a building society’s  
activity,  of the g eneral terms and c onditions of b usiness , general terms and c onditions of target ed savings 
agreements , as well as appropriate internal regulations and instruments for the management, supervision 
and control of risks related to the activities of a building society.  Moreover, the draft law empowers KNF to 
issue resolutions specifying detailed rules regarding the size of a building society’s  share capital or own 
funds, precise liquidity and risk requirements as regards it s activity and specific  reporting requirements10. 
It also authorises and obliges KNF  to issue orders and recommendations to ensure that the activity of 
building societies complies with the general terms and conditions of targeted savings agreements11. The 
draft law obliges building societ ies to allocate at least  3 % of the total savings deposits (or an increased 
amount as indicated by KNF) to a reserve fund.  Funds  from the reserve would only be invested in safe 
assets specified in the draft law and would only be drawn upon if mortgage loans could not be paid out fro m 
the building society’s available funds within the timescales specified in the mortgage loan agreements12. 
1.4 The activities  of building societies  comprise,  in particular, accepting savings deposits from natural 
persons to an interest -bearing account and granting mortgage loans  to such savers , from funds so 
collected,  with the aim of financing housing- related investments specifically enumerated in the draft law13. 
For these purposes, building societies w ill conclude with savers targeted savings agreements that  conform 
with the general terms of business and the general terms of targeted savings agreements , defining, inter 
alia, the housing purpose, the target ed savings agreement amount, the period of saving, the amounts and 
timescales of savings deposits, the interest payable on the savings deposit, a building society’s obligation to enter into a mortgage loan agreement with a description of the terms and rules for issuing the loan, the 
amount of the mortgage loan and the interest payable, along with the manner and timescale in which it 
would be paid out
14. The saving period may not be less than four years15 and t he amount of the loan may 
not exceed the sum of the savings deposits with due interest and the housing bonus16. The loan interest 
rate may not exceed the interest rate of the savings deposit by more than three nominal percentage points 
and would remain unchanged throughout the loan repayment period17. A housing loan granted to a saver 
by a building society is  to be secured with a mortgage, and its amount may not exceed 80 % of the value 
 
8  See the explanatory memorandum accompany ing the draft law, p. 15.  
9  Articles 3 a nd 4 of the draft law.  
10  Article 4(2) of the draft law.  
11  Article 4(3) of the draft law.  
12  Articles 7(5) and 7(6) of the draft law.  
13  Article s 6 and 12 of the draft law . 
14  Article 9 of the draft law.  
15  Article 9(5) of the draft law.  
16  Article 9(6) of the draft law.  
17  Article 11 of the draft law.  
ECB -PUBLIC  
3 of the real estate securing the loan18. To fund their activities building societies are entitled to take out loans 
with a term of up to one year and issue bank securities with a maturity of no more than one year19. 
1.5 In the event that a building society needs  to suspend its obligations due to temporary financial 
difficulties, the draft law empowers KNF to order the building society  to suspend payments for a period of 
three months with the exception of payments of reasonable costs for day -to-day operations.20 If the building 
society’s financial situation does  not improve within this period, KNF may decide to merge the building 
society  with another  building society  or to liquidate it. With regard to such a decision, the draft law  refers to 
the application of the provisions of the Law on banking21. 
1.6 KNF, after seeking the opinion of the building society, may appoint a trustee and a deputy trustee for 
the building society. The functions of a trustee include continuous ly monitoring the observance by the 
building society of the targeted savings agreements c oncluded between the building society and saver s for 
housing purposes , and in particular of the order of issuing loans22.  
1.7 The draft law also establishes  the principles of saving for housing purposes.  In this respect, t he draft 
law amends the Polish Law on social forms of housing development23 by introducing an entitlement for 
natural persons with full legal capacity and with  savings  in building societies  and who are  subject to 
unlimited tax obligations in the Republic of Poland to receive a savings bonus , granted annually from the 
State budget , for the amount of 20 % of the cash deposits  accumulated in a given year (or PLN 12,000 if 
the cash deposits  would exceed this level)24. Should  the sum of savings accumulated on the savings 
account in a given year exceed this sum, then the surplus savings would be the basis for obtaining a savi ngs 
bonus in the following years, up to that  amount.  If the saver concludes  more agreements with building 
societies and the accumulated savings deposits exceed the amount in question, the saver would be obliged 
to indicate under which agreement  he wants to receive the savings bonus.  However , the bonus would be 
applied in the firs t instance to savings made under the earliest dated agreements.  
1.8 The draft law proposes an arrangement under which the minimum  reserves  referred to in the Law on 
Narodowy Bank Polski25 (hereinafter the ‘Law on NBP ’) is paid from savings deposits collected in building 
societies in accordance with targeted savings agreements for housing purposes26. 
 
2. Observations  
2.1 The ECB recalls its opinion on a n earlier  draft law aimed at regulating the legal framework of building 
societies in Poland, which was , however,  not adopted27. In that opinion the ECB made observations on the 
 
18  Article 14(1) of the draft law.  
19  Article 6(2) of the draft law.  
20  Article 13(1) of the draft law.  
21  Article 13(2) of the draft law.  
22  Article 16 of the draft law.  
23  Ustawa z dnia 26 października 1995 r. o społecznych formach rozwoju mieszkalnictwa (consolidated text: Dziennik 
Ustaw z 2021 r., poz. 2224 ). In the draft law, this law is referred to as the Law on certain forms of support for housing 
construction, as the name of the law wa s changed after the draft law was prepared, on August 10, 2022, under the 
law of July 7, 2022.  
24  Article 18 of the draft law.  
25  Ustawa z dnia 29 sierpnia 1997 r. o Narodowym Banku Polskim (consolidated text: Dziennik Ustaw z 2022 r., poz.  492).  
26  Article 21 of the draft law.  
27  See Opinion CON/2010/81. All ECB Opinions are available on EUR -Lex. 
ECB -PUBLIC  
4 proposed exclusion,  under the earlier  draft law , of building societies  from the obligation  to maintain 
minimum reserves with Narodowy Bank Polski  (NBP), as well as on the calculation of the building societies’ 
proposed contributions to the Polish deposit  guarantee scheme28. This draft law does , however,  not 
replicate the solutions provided for in the  earlier  draft law.  
2.2 The ECB understands that under the draft law building societies  qualify  as credit institutions within 
the meaning of Article 4(1) , point (1) , of Regulation (EU) No 575/2013 of the European Parliament and of 
the Council29. There  credit institutions are defined as undertakings the business of which consists of, inter 
alia, taking deposits or other repayable funds from the public and grant ing credits for its own account. 
Building societies would fulfil both of these  functional criteria of a ‘credit institution’, as they would: (i)  receive 
deposits from natural persons, i.e. deposits ‘from the public’; and (ii) grant credit for their own account . In 
this respect the ECB notes that the only entities in Poland that fulf il the functional criteria of credit institutions 
but are exempted from the scope of both Regulation (EU) No 575/2013 as well as Directive 2013/36/EU  of 
the European Parliament and of the Council30 are cooperative savings and credit unions ( spółdzielcze kasy 
oszczędnościowo – kredytowe)31. As a result , Regulation (EU) No 575/2013, which applies directly in 
Poland without transposition, would be applicable to building societies  operating either as banks in the form 
of joint-stock companies or as cooperatives.  
2.3 The ECB notes that  the draft law32 would authorise KNF to issue specific resolutions  that only apply 
to building societies. However, as Regulation (EU) No 575/201333 largely harmonises capital, liquidity and 
reporting at Union level, it is not clear what specific requirements are meant, and how they would interact 
with Union ones . In addition, the require ment that  building societies set aside 3  % of their savings deposits 
as a reserve34 provides a specific example where the interaction between the draft law and Union law 
requirements is complex . Moreover, the draft law allows  building societies to invest that reserve in specific 
high-quality assets35. This might interfere with the leverage,  risk-weighted capital , liquidity and funding 
requirements  laid down in Regulation (EU) No 575/201336. The ECB invites the Polish legislator to reflect 
on how this matter can  be clarified in the draft law . 
2.4 In the context of liquidity, the ECB notes that  the draft law restricts the ability of building societies to 
issue debt securities, by imposing a maximum original maturity of one year on any such external debt used 
to fund mortgage loans37. From a financial stability perspective, such a restriction may not be  desirable as 
mortgage loans tend to have long maturities and this restriction may unduly limit the scope for managing 
the funding liquidity risk s. 
 
28  See paragraphs 2.1 and 2.2. of ECB Opinion CON/2010/81.  
29  Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential 
requirements for credit institutions and amending Regulation (EU) No 648/2012 (OJ L 176 27.6.2013, p. 1).  
30  Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit 
institutions and the prudential supervision of credit institutions, amending Directive 2002/87/EC and repealing 
Directives 2006/48/EC and 2006/49/EC  (OJ L 176 , 27.6.2013, p. 338).  
31  See Article 1 of Regulation (EU) No 575/2013 in conjunction with Article 2(5), point (19), of Directive 2013/36/EU.  
32  See Article 4(2) of the draft law.  
33  See Part s Three  and Six and Part Seven A of Regulation (EU) No 575/2013.  
34  Article 7(5) of the draft law.  
35  Article 7(3) of the draft law.  
36  See Part s Two, Six and Seven of Regulation (EU) No 575/2013.  
37  Article 6(2) of the draft law.  
ECB -PUBLIC  
5 2.5 Moreover, given that Directive 2014/59/EU of the European Parliament and of the Council38, 
regulating the recovery and resolution of credit institutions, applies to credit institutions within the meaning 
of Article 4(1) , point (1), of Regulation (EU) No 575/2013, the possible implications of the application of 
such a framework to building societies need to be taken into account. In this context, for example, the draft 
law’s restrictions on the ability of building societies to issue debt securities , imposing  a maximum original 
maturity of one y ear on any such external debt used to fund mortgage loans39, might have an impact on 
building societ ies’ capacity to comply with  the minimum requirements for own funds and eligible liabilities 
(MREL), as only eligible liabilities instruments with a residual maturity of at least  one year qualify fully as 
MREL40. 
2.6 In earlier opinions41 the ECB noted that Member States whose currency is not the euro retain their 
powers in the field of monetary policy according to national  law. As and when the euro is  introduced, 
Poland’s monetary policy will need to be consistent with the Eurosystem’s operational  framework . 
Therefore,  credit institutions should be familiar with the requirements that would apply  to them once the 
single monetary policy is implemented in Poland. In view of the foregoing, the ECB notes that the 
Eurosystem’s minimum reserves obligations apply to entities that fulfil the functional criteria of ‘credit 
institution’ according to the definition contained in the Eurosystem’s minimum  reserves rules42, which cross-
refers to the definition in Article 4(1), point (1) of Regulation (EU) No 575/2013. As building societies would  
fulfil both of the functional  criteria of ‘credit institution’, they would be subject to the Eurosystem’s minimum 
reserves requirements when Poland adopts the euro. Such requirements, and the sanctions related to 
them43, would apply directly under  Union law.  
2.7 The draft law appears to propose an arrangement under which building societies would be obliged 
to hold minimum reserves with NBP44. However, the wording of  the draft law is not fully clear in this respect 
and does not exclude an interpretation whereby building societies operating in the form of cooperatives 
would be excluded from the obligation to maintain minimum reserves. This is because  the draft law’s 
provision refers to the Law on NBP , which only regulates minimum reserve requirements in relation to 
banks and cooperative savings and credit unions , but does not explicitly impose minimum reserve 
requirements on cooperatives. The ECB suggests  that, to ensure legal certainty,  the Polish legislator 
clarif ies this matter  including, eventually,  through an appropriate amendment to the Law on NBP . 
2.8 Based on Directive 2014/49/EU of the European Parliament and of the Council45, it seem s that 
 
38  Directive 2014/ 59/EU of the European Parliament and of the Council of  15 May 2014 establishing a framework for the 
recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and 
Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 
2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament  and of the 
Council  (OJ L 173, 12.6.2014, p. 1 90). 
39   Article 6(2) of the draft law.  
40  See Article 45b(1) , point (c), of Directive 2014/ 59/EU.  
41  See, e.g., paragraph 2 of Opinion CON/2016/40 , paragraph 2.2 of Opinion CON/2018/48 and paragraph 3.1 of Opinion 
CON/2021/17 .  
42  See Article 2( 4) of Regulation (EU) 2021/378 of the European Central Bank of 22 January 2021 on the application of 
minimum reserve requirements (ECB/2021/1)  (OJ L 73, 3.3.2021, p. 1).  
43  See Article 7 of Council Regulation (EC) No 2531/98 of 23 November 1998 concerning the application of minimum 
reserves by the European Central Bank (OJ L 318, 27.11.1998, p. 1) and European Central Bank Regulation  (EC) No 
2157/1999  of 23  September  1999 on the powers of the European Central Bank to impose sanctions (ECB/1999/4) (OJ 
L 264, 12.10.1999, p. 21).  
44  Article 21 of the draft law.  
45  Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes 
(OJ L 17 3, 12.6.2014 , p. 1 49).  
ECB -PUBLIC  
6 savings  deposits in building societies would be covered by the national deposit guarantee scheme, as 
building societies fulfil the criteria of ‘credit institution’ under U nion law46. This would be the case for both 
building societies operating in the form of banks, as well as in the form of cooperatives, as the latter also 
receive deposits from the public and grant credit for their own account. The ECB understands , however, 
that this interpretation may be questioned under Polish law47, as t he matter  is not regulated in the draft law , 
and the entities covered by the Law on the Bank Guarantee Fund48 comprise  banks established in the 
territory of the Republic of Poland (except for mortgage banks), branches of foreign banks based outside 
the Union and cooperative savings  and credit unions . Therefore, while it would seem that the deposit 
guarantee scheme covers building societies operating in the form of banks, it is more difficult to conclude 
that this s cheme covers building societies operating in the form of cooperatives . For this reason, the draft 
law could be amended in order to bring it in line with U nion law. The merger, liquidation and bankruptcy 
regimes of banks in the form of joint -stock companies and cooperatives are different49. The possibility of 
building societies conducting business activit ies under  two such different legal forms may make it 
impossible in practice to apply the solutions provided for in the draft law concerning,  e.g., the takeover of a  
building society that is a cooperative by another building society  as a result of a decision of  KNF, issued in 
connection with the poor financial situation of the acquired building society . This is because, as concerns 
decisions of KNF, the draft law only refers to the application of certain provisions of the Law on banking,  
while the Law on cooperatives contains separate provisions regarding the merger of cooperatives50. To 
ensure legal certainty, the ECB  suggest s that these issues be remedied  in the draft law.  
 
This opinion will b e published on EUR -Lex.  
 
 
Done at Frankfurt am Main, 10 November  2022.  
 
[signed]  
 
The President of the ECB  
Christine  LAGARDE  
 
46  See Article 4(1) , point (1) , of Regulation (EU) No 575/2013.  
47  See the letter from the Governor of NBP addressed to the head of the chancellery of the Sejm of 8 July 2022, p. 5. 
48  See Article 2(41) and Articles 17 and 18 of the Law on the Bank Guarantee Fund, the deposit guarantee scheme and 
resolution (Ustawa z dnia 10 czerwca 2016 r. o Bankowym Funduszu Gwarancyjnym, systemie gwarantowania 
depozytów oraz przymusowej restrukturyzacji (consolidated text: Dziennik Ustaw z 2022 r.,  poz. 793) ). 
49  See Article 124  and Article s 146b -169 of the Law on banking and Articles 96 -102 and 113- 137 of the Law on 
cooperatives . 
50  See Articles 96 -102 of the Law on cooperatives.