Dara Calleary
Question:105 Deputy Dara Calleary asked the Minister for Finance the supports available to the credit union sector to compensate for loan losses; and if he will make a statement on the matter. [36415/12]
View answerThursday, 19 July 2012
Questions (105)
Written answers
It is the responsibility of each credit union to make sure that it makes adequate provision in its accounts for bad or doubtful debts to ensure that it is sufficiently funded to cover loan losses. Credit unions must also maintain reserves of 10% of assets as a buffer against unexpected losses. The Irish League of Credit Unions (ILCU) has operated on an all-island basis a savings protection scheme (SPS) for credit unions since 1989. The SPS operates by providing financial support to credit unions that get into difficulty. This is a privately owned and managed fund.
The Commission on Credit Unions recommended the establishment of a statutory stabilisation mechanism whereby financial assistance could be given to credit unions on an individual basis, in certain limited circumstances, with certain conditions attached to the provision of such assistance. This would be facilitated by the establishment of a stabilisation fund to be managed by the Central Bank. The General Scheme of the Credit Union Bill 2012, which was published on 28 June 2012, sets out the legislative proposals for this statutory stabilisation mechanism.