MAY 2018

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USA Setback for National Credit Union Administration in US court battle A legal battle in the US between the National Credit Union Administration (NCUA) and the American Bankers Association, over the size of the field of membership permitted for credit unions, saw mixed results in a federal ruling. A federal judge in the US District Court upheld two portions of the NCUA’s rules but struck down two others, following a lawsuit launched by the ABA in December 2016. Bankers had complained that some credit unions have grown too large, when their membership is supposed to be limited by association or geographic area. The two provisions struck down by Judge Dabney Friedrich were: • a measure that automatically qualified a combined statistical area of up to 2.5 million people to be a local community • and a provision that increased the population limit for rural districts to 1 million people. Other provisions – one on serving corebased statistical areas without serving their urban core, and another adding “adjacent areas” to existing community fields of membership — were left in place. The ABA had argued that the contested rules were in violation of “Congress’ explicit instruction that community credit unions serve only a single, well-defined local community “Instead, it declares that large regions including millions of residents and cutting across multiple states are single ‘local’ communities.” National credit union trade groups, including the National Association of Federally-Insured Credit Unions, the Credit Union National Association and CUNA Mutual Group, criticised the ruling. “Our organisations are pleased the court upheld components of the NCUA’s fieldof-membership rule; however, we strongly disagree with the court’s decision that aspects of the rule exceed the agency’s legal authority,” said a joint statement. “The field-of-membership rule is not only entirely consistent with the Federal Credit Union Act, but also credit unions must have the ability to grow and serve more Americans. We will continue to support the agency on this critical issue.” NCUA says it is considering its options, although others have warned that an appeal could provoke the ABA into continuing its fight against the measures which survived the judge’s ruling. EUROPEAN UNION European Parliament supports regulatory relief for credit unions Credit union representatives went to the European Parliament in Brussels to push for regulatory relief. The meeting, on 27 March, brought together the European Network of Credit Unions and the European Parliament Credit Union Interest Group. The network estimates that credit unions serve more than 7 million European households. The caucus was launched in 2014 as an informal, all-party European Parliamentary Group to raise awareness about credit unions and micro-finance among EU institutions and stakeholders. It is made up of 15 members of the European Parliament who support credit unions, including co-chair Marian Harkin (Republic of Ireland) and vice chair Paul Tang (Netherlands). They were joined by Sven Giegold (Germany), a member of the Economic and Monetary Affairs Committee (ECON), in p MEPs Paul Tang and Marian Harkin; Michael S. Edwards, VP and general counsel, WOCCU; and MEPs Sven Giegold and Luke Ming Flanagan (Image: WOCCU) highlighting ways to reduce unnecessary regulatory burdens and support increased credit union activities in the EU. Mr Giegold said: “We need to preserve the business model of smaller, low-risk actors such as good credit unions which play a useful role for the stability of the European banking sector. Financial regulation must not overburden small banks with administrative requirements but needs to properly address the risks posed by systemic institutions.” Representatives from the Irish League of Credit Unions, the National Association of Co-operative Savings and Credit Unions of Poland, the Estonian Union of Credit Cooperatives, and World Council of Credit Unions also explained how EU policy could provide regulatory relief for credit unions in Europe. 18 | MAY 2018
IRELAND Revenues up 28% at Lakeland Dairies but market woes force price cut Lakeland Dairies has reported a 28% increase in group annual revenues for the year ended 31 December 2017, up to €769.8m (£664.6m) from €601m in 2016. This yielded an operating profit of €16.8m (£14.5m) (2016: €7.2m). Profit before tax was €15.9m (£13.7m) and the co-op closed the year with a 15% increase in shareholders’ funds at €117.6m. Earning before interest, depreciation, tax and amortisation (EBIDTA) was €32.6m (£28.15m), up from €18.9m in 2016. Milk volumes processed in 2017 increased to over 1.2bn litres, reflecting ongoing expansion among Lakeland Dairies’ 2,500 milk producers and a full year of milk supply from Fane Valley Dairies, acquired in May 2016. Efficiencies across all operations enabled the removal of milk collection charges, cutting annual costs for milk suppliers by €5m. Farmer-owned, Killeshandra-based Lakeland operates across 15 counties on a cross-border basis, and exports 240 different dairy products to 80 countries. Chief executive Michael Hanley said: “In 2017, Lakeland Dairies achieved performance improvements across all divisions of the business. Trading conditions were helped by a reduction in global milk supplies and product availability. We were able to take advantage of these conditions through our efficient processing capabilities and worldwide market presences. “Our global growth has been driven by our strategy, investments, product range and the high quality output of our milk producers. While there are challenges in the global market, it is our intention to continue to drive competitiveness and overall growth, targeting opportunities across infant formulas, dairy proteins and health-related nutritional products.” “With the investments we have made, we are now in a position to process more milk than ever before. Our five year strategic plan envisages Lakeland Dairies achieving sustainable, profitable annual revenues of over €1bn by 2021.” Chair Alo Duffy added: “Research indicates our milk producers will continue to expand output by 4-5% annually over the next five years. We also welcomed 30 new entrants to milk production during 2017 – totalling 200 new entrants since 2013.” But at the end of the year, market conditions worsened, forcing the co-op to cut to its March milk price by 2.5c/L. It will balance this with a payment to support its farmers, who have been hit by bad weather and a fodder crisis. The co-op said: “Since late 2017, global market conditions have become very difficult – with a significant drop in the returns available across various product categories.” The price cut follows a cut to the February milk price by 1c/L. MAY 2018 | 19
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Page 5 and 6: NEWS ANNUAL RESULTS Co-op Group bac
Page 7 and 8: EQUALITY What is the gender pay gap
Page 9 and 10: RETAIL Midcounties Co-op announces
Page 11 and 12: Lincolnshire Co-op raised more than
Page 13 and 14: HOUSING Scottish Labour leader want
Page 15 and 16: GLOBAL UPDATES USA Berkeley Electri
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Page 25 and 26: people made aware that there is an
Page 27 and 28: Twelve motions go before at the mee
Page 29 and 30: Working together to make the Co-ope
Page 31 and 32: Healthy Choices and Ethical Challen
Page 33 and 34: The Co-op Way to sustainability The
Page 35 and 36: to cut costs, they gave up this dev
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Page 39 and 40: Recently, Co-operatives UK set up a
Page 41 and 42: problem. I consider the organisatio
Page 43 and 44: co-operatives, local markets, kinsh
Page 45 and 46: “In Wales, Labour & Co-op Assembl
Page 47 and 48: vigilance is necessary if we are to
Page 49 and 50: Gain a masters degree at the home o
Page 52: Go green with Co-op Energy 100% ren

MAY 2018

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