Dáil Éireann Debate, Tuesday - 6 December 2011
25 Deputy John Deasy asked the Minister for Finance his plans to change the provisions of section 35 of the Credit Union Act 1997, which is restricting credit unions ability to assist members; and if he will make a statement on the matter. [38429/11]
View answer26 Deputy John Deasy asked the Minister for Finance his plans to seek a deferral of the proposed section 35 amendment pending the outcome of the upcoming strategic review of the credit union sector; and if he will make a statement on the matter. [38430/11]
View answer27 Deputy John Deasy asked the Minister for Finance his plans to change the restrictions which are in place under section 35 of the Credit Union Act 1997, which limits the maximum amount of loans that can be issued in a month, based on cash flow, regardless of credit unions' existing loans to asset ratio; and if he will make a statement on the matter. [38431/11]
View answerI propose to take Questions Nos. 25 to 27, inclusive, together.
Section 35 of the Credit Union Act 1997 (Section 35) imposes limits on credit unions in relation to longer-term lending. The funding of credit unions is predominantly provided on a short-term basis in the form of on-demand savings and consequently the Section 35 limits are necessary for the protection of the financial stability of credit unions.
With regard to possible further amendments to Section 35, the Deputy will be aware that the Commission on Credit Unions is currently in place. Part of the Terms of Reference of the Commission is to examine the existing legislation and make recommendations on strengthening of the regulatory framework for the sector. I have agreed the recommendations contained in the Interim Report of the Commission which was published in October 2011. These recommendations will feed into new credit union legislation which is due to be published in June 2012. This will provide for the introduction of a Prudential Rule Book for credit unions in certain areas, including lending. Further additional changes to Section 35 were not proposed in the Interim Report. I understand, however, that the Commission will further examine the workings of Section 35 early in 2012 and may make recommendations in relation to it in its final report which is due at end-March 2012. I will consider any recommendations made by the Commission at that time.
