Draft law amending the Cooperative Savings and Loan Societies Act and, in connection therewith, amending other laws (671 SE) – first reading
Session: 15th Riigikogu, 6th sitting, plenary session.
Date: 2025-09-09 16:08
Participating Politicians:
Total Speeches: 33
Membership: 15
Agenda Duration: 40m
AI Summaries: 33/33 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The second agenda item concerned the first reading of Bill 671 — the Act amending the Credit Union Act and related acts. The presenter was the Minister of Finance, Jürgen Ligi, whose remarks introduced the bill’s objectives: the history of the existing Credit Union Act and the problems that have arisen since 2010 as a result of these changes. The assessed problems included the growth of credit unions’ assets and the use of funds as loans, inadequate state supervision, and losses to depositors due to the insolvency of ERIAL and the Estonian Development Credit Union. The question of how to ensure the safety of depositors' money also arose, as the role of credit unions as community lenders has evolved into a reality where members' limited knowledge of recovery and control is a concern. The bill proposes credit unions be directed towards a unified banking form: allowing credit unions to become only banks or cooperative banks, and ensuring Deposit Guarantee Fund protection up to €100,000.
The second part discussed a plan divided into three stages: 1) enforcement of obligations on November 1st (considering a possible postponement); 2) stricter requirements for board and supervisory board members coming into effect on July 1st of next year, increasing share capital, and adding requirements for audit control and a revision committee; 3) from January 1st, 2029, credit unions will continue operating only in the form of a bank or cooperative bank if they wish to continue attracting deposits, and they must have a license from the Financial Supervision Authority. It was also emphasized that Estonia’s liberalized regulations are extremely liberal, and as with other countries, cooperative financial activity is envisioned in the future in the form of cooperative banks, with greater supervision and deposit guarantees. The final message raised was the need to protect depositors' assets and ensure a non-exchange, but secure and controlled attraction of deposits.
Overall, the bill is aimed at reducing risks and protecting depositors' assets, while striving to maintain reasonable sustainability and flexibility: the ability to continue offering cooperative financial services, but with stricter supervision and defined protection mechanisms – so that deposits are securely guaranteed and credit unions can transform into banks or cooperative banks if necessary. All of this is intended to balance the protection of depositors' rights and financial stability, while also reducing the risks that have arisen from hitherto unregulated activity.
Decisions Made 3
The Finance Committee unanimously adopted a decision to bring the bill to the plenary session's agenda on September 10th, to conclude the first reading, and to appoint a representative for the lead committee who will represent the committee (Mart Võrklaev).
The Riigikogu adopted the original intention: a new, non-harmonized bill has not been established, and an attempt was made to achieve consensus in the first reading; furthermore, it was confirmed that the deadline for submitting amendments is September 23rd at 5:15 PM, the first reading is considered concluded, and proceedings will continue with the second reading.
The Isamaa faction’s proposal to reject draft 671 on its first reading failed – the vote was 12 in favor, 41 against, 0 abstentions; the proposal did not find support. The reading continued, and subsequent steps involved confirming deadlines for submitting planned amendments.
Most Active Speaker
The most active speaker was 3qzWXtEX7Y4, member of the finance committee, Mart Võrklaev (Isamaa). He acted as a representative leading the commission and presented the central position—representing the leading commission and guiding the course of the first reading. His position is on the right, or right-wing (nationalist/primarily conservative) political direction.
Aseesimees Arvo Aller
AI Summary
Vice-Chairman Arvo Aller informed us that we are moving on to the second item on the agenda, where we will be discussing the first reading of Draft Bill 671—amendments to the Credit and Loan Union Act and amendments to other related acts, with Minister of Finance Jürgen Ligi serving as the rapporteur.
Rahandusminister Jürgen Ligi
AI Summary
The Ministry of Finance's draft bill sets a condition for savings and loan associations: if they wish to continue accepting deposits, the association must obtain a banking license from the Financial Supervision Authority or form a cooperative bank. Furthermore, its activities will be subject to state supervision, and depositors will be protected through the Guarantee Fund for up to 100,000 euros.
Aseesimees Arvo Aller
AI Summary
The Vice-Chairman asks Mr. Reinsalu to stop clicking his pen, as the noise is interfering with the microphone, and calls for attention to the presenter.
Rahandusminister Jürgen Ligi
AI Summary
The Ministry of Finance's draft bill sets the goal of ending the uncontrolled raising of funds by savings and loan associations, increasing depositor awareness and rights, and transitioning the security of cooperative financial activity through three phases. Following these phases, starting in 2029, only cooperatives operating in the form of a cooperative bank or as licensed banks will be permitted to raise deposits, while other cooperatives may only offer other services.
Aseesimees Arvo Aller
AI Summary
Vice-Chairman Arvo Aller thanked the rapporteur, informed the body that there were no questions, but noted that Toomas Uibo was unfortunately late and may submit questions based on the discussion held in the lead committee. He then asked Mart Võrklaev, as a member of both the lead committee and the Finance Committee, to take the floor.
Mart Võrklaev
Profiling Eesti Reformierakonna fraktsioonAI Summary
The Finance Committee discussed the draft legislation, the minister provided a comprehensive overview, and the committee reached a consensus on the following decisions: the bill will be placed on the plenary session agenda for September 10th, the first reading will be concluded, and Mart Võrklaev will be designated as the lead rapporteur.
Aseesimees Arvo Aller
AI Summary
Vice-Chairman Arvo Aller announces that we now have questions, and calls upon Peeter Ernits to respond.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits questions why the opinions of credit unions are simply noted, and why rigid capital requirements are in force (e.g., 1 million must be 5 million), while simultaneously emphasizing the need to maintain diversity and promote wealth in the financial and banking sector.
Mart Võrklaev
Profiling Eesti Reformierakonna fraktsioonAI Summary
Mart Võrklaev explains that the central cooperative model is not functioning and depositors are unprotected. Therefore, credit unions must be transformed into banks within four years, meaning their activities will fall under the supervision of the Financial Supervisory Authority and their deposits will be protected.
Aseesimees Arvo Aller
AI Summary
Toomas Uibo is invited to the stage at the beginning of the address.
Toomas Uibo
Profiling Eesti 200 fraktsioonAI Summary
Toomas Uibo asked whether a couple dozen farmers could form a credit union to jointly purchase a combine harvester or lend money to one another without a public offering, and whether the historical role of savings and loan associations will remain or disappear.
Mart Võrklaev
Profiling Eesti Reformierakonna fraktsioonAI Summary
Mart Võrklaev voiced concerns that, starting next year, credit unions will no longer be allowed to be established. Furthermore, even those that publicly solicit deposits fail to meet regulatory and guarantee requirements, and they are frequently used for real estate development and other high-risk lending, which could potentially cause losses for depositors.
Urve Tiidus
Profiling Eesti Reformierakonna fraktsioonAI Summary
Urve Tiidus refers to the Chancellor of Justice’s position that even long-standing and problem-free credit unions may cease to exist in their current form when complying with the new requirements, and requests a more precise forecast of how many of them will remain — two to three or about ten.
Aseesimees Arvo Aller
AI Summary
The presenter asks Urve Tiidus to come to the stage.
Mart Võrklaev
Profiling Eesti Reformierakonna fraktsioonAI Summary
Mart Võrklaev stated that the law grants members of credit unions more rights to participate in decision-making and demand information, because some unions might transform themselves into banks, and in such a case, the protection of depositors' money and supervision is crucial.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller called upon Urmas Reinsalu to speak.
Urmas Reinsalu
Profiling Isamaa fraktsioonAI Summary
Urmas Reinsalu asks Võrklaev whether the problems concerning the credit unions and the worries related to returning depositors' assets under current law stem from a supervisory failure, and whether the value of depositors' assets is guaranteed in the case of the restructuring set to conclude by 2029, as the boards of the unions promise.
Mart Võrklaev
Profiling Eesti Reformierakonna fraktsioonAI Summary
Mart Võrklaev emphasizes that insufficient supervision of savings and loan associations creates risks because members are neither adequately informed nor involved, and decisions are often entrusted to only one or two members. Therefore, the law is being reformed so that these associations can continue operating as cooperative banks, whose supervision would be carried out by the Financial Supervision Authority, and whose deposits would be protected by the Guarantee Fund.
Aseesimees Arvo Aller
AI Summary
Deputy Speaker Arvo Aller recognizes Urmas Reinsalu.
Urmas Reinsalu
Profiling Isamaa fraktsioonAI Summary
Urmas Reinsalu asked whether the abolition of supervision in 2010 was a government mistake, and whether now, 15 years later, credit and savings associations must be liquidated due to the lack of oversight. He also asked whether the commission discussed less invasive ways to restore supervision, ensuring proper supervisory procedures, providing insurance for depositors, and how long this process might take.
Mart Võrklaev
Profiling Eesti Reformierakonna fraktsioonAI Summary
Mart Võrklaev said that the regional requirements were changed in 2010, meaning credit unions no longer have to operate solely within one region. He apologized for any potential misstatement and added that supervisory activities weren't in place even before 2010 and should be reviewed, although he lacked specific data.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller invites Varro Vooglaid to take the floor.
Varro Vooglaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Varro Vooglaid asks whether the commission has discussed that constitutional rights may only be restricted if a legal basis exists, and whether, to achieve the same objective—ensuring the security of deposits—less restrictive measures could be employed than prohibiting the activities of savings and loan associations, referencing § 31 of the Constitution and the protection afforded to business and association forms.
Mart Võrklaev
Profiling Eesti Reformierakonna fraktsioonAI Summary
Mart Võrklaev said that the commission did not discuss the exact topic, but instead reviewed practices from other countries concerning deposit-taking in the form of a cooperative bank, as well as the supervision of credit unions and deposits guaranteed by the guarantee fund in Estonia. He emphasized that the goal is to find a balance between the rights of depositors and supervision, and that no one is being forced to cease operations, but rather they must restructure their activities over a reasonable and long-term period.
Aseesimees Arvo Aller
AI Summary
This address is merely a plea, directed at Varro Vooglaid.
Varro Vooglaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Varro Vooglaid questions whether the same objective could be achieved through less restrictive measures thanks to more effective oversight, and whether the use of more invasive measures is actually unconstitutional.
Mart Võrklaev
Profiling Eesti Reformierakonna fraktsioonAI Summary
Mart Võrklaev said that the bill's goal is to find a balance point, under which savings and loan associations (or credit unions), if they wish to attract deposits, can transform into banks or cooperative banks within three to four years, but deposits will remain protected, and the associations will be subject to the control of the Financial Supervision Authority, ensuring the rights of depositors and the protection of the Guarantee Fund.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller expresses his thanks, concludes the question period, and opens the floor for debate with the parliamentary groups. He notes that Varro Vooglaid has signed up to speak, asks if this was an error, and requests that he withdraw his name from the list. Helir-Valdor Seeder then takes the floor on behalf of the Isamaa faction.
Helir-Valdor Seeder
Profiling Isamaa fraktsioonAI Summary
Helir-Valdor Seeder stated that he does not support the forced liquidation of credit unions, emphasizing the need to strengthen oversight and preserve their role in ensuring competition and providing affordable and flexible services.
Aseesimees Arvo Aller
AI Summary
The message says three extra minutes are needed.
Helir-Valdor Seeder
Profiling Isamaa fraktsioonAI Summary
The Isamaa parliamentary group cannot agree to the bill in its current form and therefore wishes to reject the first reading, urging the government to submit a new draft that focuses on the supervision and substantive problems of savings and loan associations, rather than their liquidation; concurrently, the speaker made two procedural remarks concerning the late arrival of those posing questions and the departure of ministers during the discussion, stressing the presiding officer's responsibility to ensure the culture and strictness of the debate.
Aseesimees Arvo Aller
AI Summary
Arvo Aller declared the discussions closed and put to a vote the Isamaa faction's proposal to reject Bill 671 on the first reading.
Aseesimees Arvo Aller
AI Summary
The proposal received 12 votes in favor, 41 against, and 0 abstentions; it did not receive support. The first reading is concluded, the deadline for submitting amendments is September 23rd at 5:15 PM, and we have completed the second item on the agenda, and the sitting is adjourned.