Opinion of the European Central Bank of 10 November 2022 on building societies (CON/2022/38)
Date: 2022-11-10
Institutions: European Central Bank
Subjects: financial stability, monetary policy

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 10 November 2022  

on building societies  

(CON/2022/38) 

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 law 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/EC 1, 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 Council 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 

forms 2, either as (i) banks 3 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)  cooperatives 5  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, the draft law represents an attempt to re-establish the 

system of building societies that was first introduced in Polish law in 1997 7 but was never put into practice. 

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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). 
Article 2(1) of the draft law. 

Banks do not  include credit  unions.  The  term  ‘credit  institutions’, under Polish  law,  only  refers  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)).  

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)). 

Pursuant to the definition contained in Article 1(1) of the Law on cooperatives, 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. 
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)). 
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.  

 
 
 
 
 
 
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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  authorisation  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 authorisation. These include, 

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 general terms and conditions of business, general terms and conditions of targeted 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 its activity and specific reporting requirements 10. 

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 agreements 11. The 

draft law obliges building societies 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 from 

the building society’s available funds within the timescales specified in the mortgage loan agreements 12. 

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 law 13. 

For these purposes, building societies will 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 targeted 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 out14. The saving period may not be less than four years 15 and the amount of the loan may 

not exceed the sum of the savings deposits with due interest and the housing bonus 16. 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 period 17. 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 

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See the explanatory memorandum accompanying the draft law, p. 15. 
Articles 3 and 4 of the draft law. 

Article 4(2) of the draft law. 
Article 4(3) of the draft law. 

Articles 7(5) and 7(6) of the draft law. 
Articles 6 and 12 of the draft law. 

Article 9 of the draft law. 
Article 9(5) of the draft law. 
Article 9(6) of the draft law. 

Article 11 of the draft law. 

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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 year 19. 

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  continuously  monitoring  the  observance  by  the 

building society of the targeted savings agreements concluded between the building society and savers for 

housing purposes, and in particular of the order of issuing loans 22.  

1.7  The draft law also establishes the principles of saving for housing purposes. In this respect, the 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 savings 

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 first 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 purposes 26. 

2. 

Observations 

2.1  The ECB recalls its opinion on an earlier draft law aimed at regulating the legal framework of building 

societies in Poland, which was, however, not adopted 27. In that opinion the ECB made observations on the 

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Article 14(1) of the draft law. 

Article 6(2) of the draft law. 
Article 13(1) of the draft law. 

Article 13(2) of the draft law. 
Article 16 of the draft law. 

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 was changed after the draft law was prepared, on August 10, 2022, under the 
law of July 7, 2022. 

Article 18 of the draft law. 
Ustawa z dnia 29 sierpnia 1997 r. o Narodowym Banku Polskim (consolidated text: Dziennik Ustaw z 2022 r., poz. 492). 
Article 21 of the draft law. 

See Opinion CON/2010/81. All ECB Opinions are available on EUR-Lex. 

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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  granting  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 fulfil 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 law 32 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 requirement 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  assets 35.  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 loans 37. 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 risks. 

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37  

See paragraphs 2.1 and 2.2. of ECB Opinion CON/2010/81. 

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). 

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).  
See Article 1 of Regulation (EU) No 575/2013 in conjunction with Article 2(5), point (19), of Directive 2013/36/EU. 

See Article 4(2) of the draft law. 
See Parts Three and Six and Part Seven A of Regulation (EU) No 575/2013. 

Article 7(5) of the draft law. 
Article 7(3) of the draft law. 
See Parts Two, Six and Seven of Regulation (EU) No 575/2013. 

Article 6(2) of the draft law. 

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2.5  Moreover,  given  that  Directive  2014/59/EU  of  the  European  Parliament  and  of  the  Council 38, 

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 year on any such external debt used to fund mortgage loans 39, might have an impact on 

building societies’ 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 opinions 41 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 rules 42, 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 

them 43, 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 NBP 44. 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 

clarifies 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  seems  that 

38  

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40  
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43  

44  
45  

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. 190). 
Article 6(2) of the draft law. 
See Article 45b(1), point (c), of Directive 2014/59/EU. 
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.  
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). 
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). 
Article 21 of the draft law. 
Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes 
(OJ L 173, 12.6.2014, p. 149).  

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savings  deposits  in  building  societies  would  be  covered  by  the  national  deposit  guarantee  scheme,  as 

building societies fulfil the criteria of ‘credit institution’ under Union 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 the 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 scheme 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 Union law. The merger, liquidation and bankruptcy 

regimes of banks in the form of joint-stock companies and cooperatives are different 49. The possibility of 

building  societies  conducting  business  activities  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 cooperatives 50. To 

ensure legal certainty, the ECB suggests that these issues be remedied in the draft law. 

This opinion will be published on EUR-Lex.  

Done at Frankfurt am Main, 10 November 2022. 

[signed] 

The President of the ECB 

Christine LAGARDE 

46  
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49  

50  

See Article 4(1), point (1), of Regulation (EU) No 575/2013. 
See the letter from the Governor of NBP addressed to the head of the chancellery of the Sejm of 8 July 2022, p. 5. 

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)). 
See  Article  124  and  Articles  146b-169  of  the  Law  on  banking  and  Articles  96-102  and  113-137  of  the  Law  on 
cooperatives. 

See Articles 96-102 of the Law on cooperatives.  

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