Seán Ó Fearghaíl
Question:134. Deputy Seán Ó Fearghaíl asked the Minister for Finance his plans for the future of Newbridge Credit Union; and if he will make a statement on the matter. [44182/13]
View answerTuesday, 22 October 2013
Questions (134, 150)
Seán Ó Fearghaíl
Question:150. Deputy Seán Ó Fearghaíl asked the Minister for Finance if he has had, or if he plans to have, discussions with the regulator of credit unions and the Central Bank of Ireland in relation to the recovery plan for Newbridge Credit Union; and if he will make a statement on the matter. [44644/13]
View answerWritten answers
I propose to take Questions Nos. 134 and 150 together.
On 13 January 2012, the Central Bank of Ireland secured a High Court Order for the appointment of a Special Manager to Newbridge Credit Union. Further High Court applications were made to extend the term of appointment of the Special Manager, the latest being in June 2013, and High Court Orders were secured for a 6 month extension period on each occasion.
The Central Bank undertook a process under the Central Bank and Credit Institutions (Resolution) Act 2011, involving the examination of possible combinations with other credit unions. As part of this process, Naas Credit Union submitted a proposal to the Central Bank, setting out the basis upon which Naas Credit Union would be prepared to combine with Newbridge.
At the request of the Governor of the Central Bank, I have confirmed that I am prepared, in principle, to support the proposal. However, the proposal remains subject to amongst other things due diligence, completion of relevant documentation, Naas Credit Union board approval, regulatory consideration and High Court approval. I expect that these steps will be completed expeditiously and that the Naas/Newbridge combination will be finalised by the end of this year. This will necessitate a significant capital investment of taxpayers' funds into Newbridge Credit Union to cover the losses at Newbridge and to ensure the protection of members' savings and the stability of Newbridge into the future. The successful combination of these credit unions is considered the best way to ensure the continuity of credit union services for members in Newbridge.
Newbridge Credit Union Action group has submitted an alternative proposal to me regarding Newbridge Credit Union. I have referred the proposal to the Governor of the Central Bank for examination with a view to arranging a meeting between the Central Bank and the Newbridge Credit Union Action Group.
Section 91 of the Central Bank and Credit Institutions (Resolution) Act 2011 provides that the Central Bank may direct a credit institution to prepare a recovery plan setting out actions that could be taken to facilitate the continuation, or secure the business or part of the business, of that credit institution in a situation where the institution is experiencing financial instability. The Central Bank has not issued such a direction to Newbridge Credit Union. As Minister for Finance I have no role in the exercise by the Central Bank of its functions in respect of recovery plans.