EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 19 August 2013 
on credit unions 
(CON/2013/63) 
 
Introduction and legal basis 
On 26 July 2013, the European Central Bank (ECB) r eceived a request from the Lithuanian Ministry of 
Finance for an opinion on a draft law on an amendment and a supplement to the law on credit unions (hereinafter the ‘draft law’). On 30 July 2013 the ECB received an updated draft law, which forms the 
basis of this opinion. 
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 European Central Bank by national authorities 
regarding draft legislative provisions
1, as the draft law relates to Lietuvos bankas and to rules applicable 
to financial institutions insofar as they materially influence the stability of financial institutions and 
markets. In accordance with the firs t 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 
1.1 The aim of the draft law is to ensure the sustai nable growth of credit unions and to strengthen the 
regulatory framework for credit unions, including more effective governance, risk management, 
regulatory and resolution requirements. 
1.2 More particularly, the draft law provides for:  (a) a streamlined licencing process for credit unions; 
(b) enhanced  capital requirements for credit unions,  including the requirement to replenish capital 
if it falls below a specified threshold; (c) restrictions on risk-taking, including requirements in respect of borrowing, lending, investment and risk management; (d) more robust governance rules 
for credit unions, including more stringent require ments for managers and more active involvement 
of members in the management of credit unions; (e) an expansion of credit unions’ potential 
membership base and of the customer base for the financial services that may be provided by credit 
unions; and (f) reinforced supervision of cred it unions by Lietuvos bankas, including a new 
measure allowing Lietuvos bankas to require, in the event of distress, the transfer of a credit 
union’s assets, rights and liabilities to another credit institution. 
                                                 
1 OJ L 189, 3.7.1998, p. 42. 
ECB-PUBLIC  
2 2. General observations 
2.1 Credit unions currently account for 2.2% of the total assets of the Lithuanian national financial 
system2, and their activities and asset volume have expa nded very rapidly over the past few years. 
2.2 The ECB welcomes the substantial enhancement of the regulatory and supervisory framework for 
credit unions, which aims at improving the protec tion of credit union members and strengthening 
the safety net for the credit union system3. 
2.3 The ECB notes that the proposed amendments to  the legislation on credit unions do not envisage 
the possibility of a credit union becoming a commer cial bank. The ECB takes the view that the 
enactment of legal provisions designed to ensure  the workability of such conversion may help 
enhance the stability and integration of the national financial system. 
 3. Minimum reserve requirements 3.1 The draft law does not address minimum reserve requirements applicable to credit unions, since 
such requirements have been laid down by Lietu vos bankas in its Rules on reserve requirements for 
credit institutions
4. 
3.2 The ECB notes that, although Member States that ha ve not adopted the euro retain competence in 
the field of monetary policy, it is nevertheless beneficial for them to achieve consistency with 
Eurosystem standards so that credit institutions in those Member States can  become familiar with 
the reserve requirements that will apply to them once the euro is introduced. 
3.3 In its Opinions CON/2005/8, CON/2008/66 and CON/2012/110 on the Lithuanian minimum 
reserves regime, the ECB emphasised the need for further harmonisation of the Lithuanian minimum reserves regime with Eurosystem standards.  In particular, it noted that Lithuanian credit 
unions, as monetary financial institutions, will be s ubject to Eurosystem reserve requirements when 
Lithuania adopts the euro
5. Consequently, the comments made by the ECB on previous occasions 
concerning the Lithuanian minimu m reserves regime remain valid. 
 
This opinion will be published on the ECB’s website.  
 
Done at Frankfurt am Main, 19 August 2013. 
[signed] 
 
The Vice-President of the ECB 
Vítor CONSTÂNCIO  
                                                 
2 Lietuvos bankas’ Financial Stability Review for 2013, availa ble on Lietuvos bankas’ website at www.lb.lt. 
3 See Opinion CON/2009/60, paragraph 7. All ECB opinions ar e published on the ECB’s website at www.ecb.europa.eu. 
4 Resolution No 38 of the Board of Lietuvos bankas of 14 Ma rch 2002 on the approval of ru les on reserve requirements for 
credit institutions. Valstybės žinios , 2002, No 31-1201. 
5 See Opinion CON/2005/8, paragraph 14; Opinion CON/2008/66,  paragraph 2.2; Opinion CON/2012/110, paragraph 2.