THE NECESSITY OF CHANGING THE LEGAL STATUS OF A CREDIT UNION

Abstract

Purpose. The article substantiates proposals for changes in the legal status of credit unions based on the analysis of the provisions of the Ukrainian legislation on credit unions and the practice of their activities. Research methods. The paper is prepared by applying the general research and special methods of scientific cognition. The authors used the methods of analysis and synthesis, comparative legal and historical legal, which allowed identifying inconsistencies in the legal status of the credit union with modern realities and proposing changes. Results. Credit unions are specific economic entities. They have a non-commercial status and are financial institutions with exclusive competence and tasks to provide inexpensive credit resources to their members and other persons. Credit unions in a simplified form act as follows: members of the credit union give it money in the form of initiation, compulsory shares, and other fees in the amount, time, and the manner determined by the charter of the credit union; the union may acquire ownership of government securities and bonds of international financial organizations placed on the territory of Ukraine; members of the credit union or other persons can receive loans at the expense of its property; the credit union may receive payments for providing loans and other services to its members, as well as income from other types of statutory activities, may receive monetary and other property donations, charitable contributions, grants, free technical assistance, as well as other receipts not prohibited by law from Ukrainian and foreign citizens (subjects), business entities and the state. Conclusions. It was determined that the main task of credit unions was to provide their members (potential or real entrepreneurs) with cheap credit resources, and additionally – other persons. As a result, credit resources from Ukrainian credit unions are provided in small volumes at higher interest rates than commercial banks. Credit unions compete with pawnshops in many cases, providing microcredits secured by household appliances, precious metal products, etc. The simplest way to remedy the situation was proposed to deprive credit unions of non-commercial status with the possibility of obtaining benefits in taxation of profits by those credit unions that provide at least 50% of their loans to their members to create and develop their own business at interest not exceeding the average interest on loans of twenty largest commercial banks of Ukraine, determined as of January 1 of the corresponding calendar year.