In January, the Riigikogu amended the Savings and Loan Associations Act. Starting from July, associations can no longer enter into new deposit agreements. After the transition period ends, only banks and credit institutions can offer deposits.
The Savings and Loan Associations Union believes that the new rules restrict their freedom too much. This may lead to withdrawals of deposits and the closure of associations.
Chancellor of Justice Ülle Madise said that the amendments significantly affect the operations of associations. Many associations may not adapt to the new rules and will close down.
In Madise's opinion, the purpose of the new law is good. It protects depositors and makes financial services more uniform. The Riigikogu can impose restrictions on business if there is a reason for it.
Savings and loan associations resemble banks but lack sufficient supervision. Therefore, it is right that they must operate like banks.
The new law restricts the rights of savings and loan associations. Starting from July, they cannot accept new deposits. This may change their cash flow and make payouts more difficult.
Madise said that although the new rules are strict, they are not unconstitutional. The Riigikogu made the decision that all deposit services should be on the same basis.
If associations cannot adapt to the new rules, they must cease operations. However, this does not make the law unconstitutional.
Madise added that if anyone disagrees with the new rules, they can go to court. The Supreme Court will ultimately decide whether the law is in accordance with the constitution.