Regulator warns to differentiate between credit consumer cooperatives and consumer societies
The Bank of Russia starts receiving correspondence from individuals offered to join a consumer society and invest in it or take a loan as if it were a credit consumer cooperative (CCC).
The regulator specifies that CCCs unite shareholders on a territorial, professional and/or other principle to satisfy financial needs of cooperative members. CCCs can receive shareholders’ money and extend loans whereas financial mutual aid is not a key activity of consumer societies which are not empowered to extend consumer loans on a professional basis1. Usually the latter unite shareholders on a territorial principle and accept asset contributions to perform trading, procurement, industrial and other activities.
One should keep in mind that the Bank of Russia maintains the state register of credit consumer cooperatives posted on its website www.cbr.ru. Besides, CCCs must be members of self-regulatory organisations (SROs) which unite credit cooperatives. The single register of SROs operating in the financial market is also available at the Bank of Russia website. In their turn, consumer societies are not included in the list of organisations under the Bank of Russia oversight and supervision.
Thus, when making decision to place their money or take out loans households should differentiate between credit consumer cooperatives and consumer societies which are not empowered to carry out professional activities to extend consumer loans and which are not subject to the Bank of Russia oversight.
1Activities to extend consumer loans carried out at least 4 times a year.