Dáil Éireann Debate, Thursday - 14 November 2013
45. Deputy Michael McGrath asked the Minister for Finance the number of credit unions the Central Bank believes will require remedial action; if he will specify the work that is ongoing in that regard; and if he will make a statement on the matter. [48718/13]
View answerThe Central Bank has informed me that, based on data submitted by credit unions as at 30 September 2013, some 20 credit unions have reported regulatory reserves below the minimum requirement of 10 per cent of assets. This gives rise to a capital shortfall in the region of €11 million in total. The Central Bank is continuing to work through a portfolio of approximately 100 credit unions on a case by case basis. The programme of work to engage with such credit unions is informed by the following:
- levels of arrears;
- Inadequate bad debt provisions;
- High fixed asset to total asset ratio and
- Other supervisory concerns including weak lending practices.
The outcomes of these engagements can include some or all of the following:
- Governance changes;
- Risk mitigation programmes;
- Lending and other business restrictions;
- Requirements for credit unions to seek capital support.
