The Indonesian Consumer Protection Law for Credit Union Depositors in Credit Union Failures: Quo Vadis?

Abstract

The 2023 credit union reforms in Indonesia have yet to thoroughly manage the protection system for credit union customers. Discriminative settlements are applied when credit unions fail to return savings. Unlike insurance companies and banks, their customers are fully protected by the Deposit Insurance Corporation when the financial institutions become insolvent. The study aims to analyze the consumer protection law implemented for credit union depositors upon the enactment of Law No. 4 of 2023 by focusing on 3 crucial issues: dual settlement of credit union regulation and credit union is covered in the Financial Services regime as well as consumer law protection should credit unions encounter failures. It is a normative and conceptual study which employs statutory law approaches to draft legal arguments on quo vadis credit union consumer protection law. The study shows that regulation reforms have successfully ended the dual settlement. However, the regulation reforms merely demonstrate the inclusion of credit unions within the financial services regime under the Financial Services Authority without providing any protection regulation addressed to credit union customers should credit unions fail. As a result, credit union depositors are unable to retain their rights due to the legal protection unavailability.