Dáil Éireann Debate, Tuesday - 2 July 2013
106. Deputy Robert Troy asked the Minister for Finance his views on whether additional capital will be required by the credit union sector; his views on the progress made to date in securing the future of credit unions; and if he will make a statement on the matter. [31928/13]
View answerIn its final report, the Commission on Credit Unions identified the financial position of credit unions in Ireland, stating that the declining fortunes of the Irish economy have not only put an additional brake on credit union development but have contributed to regression in some credit unions. In response to this, the Commission set out a range of measures to provide a strong foundation for addressing the difficult problems in the sector. Specifically, in terms of the stability of credit unions, the Commission made recommendations in relation to restructuring, stabilisation and resolution. A core recommendation was that the sector be restructured on a voluntary, incentivised and time-bound basis in order to allow the credit union sector perform to a greater level of efficiency. The Government contributed €250 million to the Credit Union Fund in December 2012 to support the restructuring of the credit union sector by the Credit Union Restructuring Board. The board is working to the timetable set out in the Commission’s report and is expected to complete its work by the end of 2015 with any necessary disbursement of funding taking place before then. Any funding provided to credit unions will be on a recoupable basis. The Commission recommended that a statutory stabilisation fund be established to address short-term problems at credit unions that are viable but undercapitalised. The statutory basis for stabilisation is in place under the Credit Union and Co-operation with Overseas Regulators Act 2012 and my Department is conducting an analysis in advance of implementation of a levy by the end of 2013. The Commission also recommended that resolution powers provided to the Central Bank under the Central Bank and Credit Institutions (Resolution) Act 2011 should be considered for those credit unions that meet certain conditions set out in that Act. The Government has provided resolution funding for credit unions of €250 million. Funding will be based on a principle of recoupment over the medium term via a levy under the Central Bank and Credit Institutions (Resolution) Act 2011. I am satisfied that these measures, together with governance and regulatory changes, introduced on foot of the Commission Report will underpin a stable credit union sector into the future.
