Consumer credit cooperative SRO powers terminated

On 21 March 2019, the Bank of Russia decided to terminate the status of the Interregional Union of Credit Cooperatives (IUCC), a self-regulatory organisation operating in the financial market and consolidating consumer credit cooperatives (CCC SRO).

The reason for this decision was the self-regulatory organisation's default on its duty to control its members. The IUCC failed to identify numerous gross violations and instances of malpractice committed by many CCCs.

The Bank of Russia Microfinance Market Department established that the IUCC had recurrently violated the provisions of the Federal Law ‘On Self-regulatory Organisations in the Financial Market’, Bank of Russia regulations and IUCC internal standards. The IUCC committed gross violations of the Russian law when auditing CCCs, failed to provide information and submit reporting to the regulator in a timely manner.

‘The Bank of Russia believes that the controlling function of self-regulatory organisations operating in the financial market is extremely important,’ said Vladimir Chistyukhin, Deputy Governor of the Bank of Russia. ‘We are gradually transitioning to a system of proportionate supervision. Its successful implementation will be contingent on SROs’ performing their duty of preventing risks threatening financial consumers to a high standard.’