Dáil Éireann Debate, Tuesday - 20 October 2015
244. Deputy Finian McGrath asked the Minister for Finance if he will support a credit union (details supplied) in Dublin 13 with its concerns with the Consultation Paper 88 issued by the Central Bank of Ireland in November 2014; and if he will make a statement on the matter. [36329/15]
View answer283. Deputy Denis Naughten asked the Minister for Finance if he will postpone the signing of commencement orders for the Credit Unions and Co-operation with Overseas Regulators Act 2012, until the serious concerns raised by the credit union movement regarding the restrictions to be placed upon it, as outlined in the Central Bank of Ireland's Consultation Paper 88, are addressed; the time frame for the planned discussions between the Central Bank of Ireland and the credit union movement with regard to business model development within credit unions; and if he will make a statement on the matter. [36139/15]
View answerI propose to take Questions Nos. 244 and 283 together.
The Credit Union and Co-operation with Overseas Regulators Act 2012 was signed into law by the President in December 2012.
It was agreed at that time that it would be neither practical nor feasible to commence the Act in its entirety in one fell swoop. Following that, an implementation timetable for the 2012 Act was devised in consultation with stakeholders, including credit union representative bodies.
Commencement of all sections of the 2012 Act has been aligned with the credit union financial year and the introduction of the underpinning Central Bank regulations, with a view to implementation of the 2012 Act in a coherent and cohesive manner. This has provided credit unions with the time necessary to ensure that any required processes or procedures are in place prior to implementation of each tranche.
I have been informed by the Central Bank that the draft regulations set out in Consultation Paper 88 (CP88), will be introduced at end December 2015. It is my intention to commence the remaining sections of the 2012 Act on 31 December 2015 in line with the introduction of the regulations. These sections of the 2012 Act, when commenced, will replace, amend or supplement existing sections of the 1997 Act.
As outlined in the Central Bank's feedback statement on CP88, as part of the consultation process I proposed that in the interests of clarity and fairness, credit unions are provided with details of the process of applying for a retention of savings above the limit amount. I have been informed by the Registry of Credit Unions that all credit unions have been contacted giving further information on its application criteria for the retention of savings in excess of €100,000. The Registry of Credit Unions intends to engage with the representative bodies and to invite comments from them prior to finalisation of the application process. When the application process is finalised, the Registry will provide an application form and explanatory notes in order to assist credit unions. It is anticipated that application forms will be available during December 2015. It is envisaged that applications will be accepted in the first quarter of 2016 and that applicant credit unions will be informed by the end of the second quarter of 2016 on the outcome of the process, which is well within the 12 month transitional period. Where a credit union has demonstrated that it meets the criteria, it will be in a position to retain members' savings in excess of €100,000 held at the commencement of the regulations.
I welcome the steps that have been taken to provide clarity for credit unions on the criteria for the retention of savings over €100,000 and also welcome the proposed engagement with the representative bodies to seek their comments on the application process.
The Central Bank has also informed me that it is committed to undertaking a review of the continued appropriateness of the savings limit, once the impact of the restructuring process can be assessed. It is envisaged that this review will commence within three years of the introduction of the regulations. The Central Bank has agreed to provide regular updates to my Department on developments in this matter.
The Central Bank has further informed me that it has now contacted all credit unions inviting them to attend upcoming information seminars being held around the country from mid-November to end-November. These seminars will provide credit unions with the opportunity to engage with the Central Bank on the new regulations and to discuss development of the credit union business model, including any changes to the regulatory framework that might be required to facilitate those developments.
The purpose of the International Credit Union Regulators' Network (ICURN) review was to assess the performance of the Central Bank's performance of its regulatory functions in relation to credit unions. The review included a number of recommendations for refinements under the 3 broad areas: Supervisory Approach; Communications and Guidance; and Resources. Under the heading Communications and Guidance, ICURN also suggested that consideration be given by the relevant authority to directing a review to evaluate the implementation of the recommendations of the Commission on Credit Unions. ICURN further stated that this is not a matter for the Central Bank. As Minister for Finance I have no plans at this time to carry out such a review.
The Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is absolutely determined to continue to support a strengthened and growing credit union movement.
