Written Answers Nos. 101-120
101. Deputy Darragh O'Brien asked the Minister for Finance if he will consider in the forthcoming budget specific measures targeted at members of the IASS pension scheme to reduce the impact of cuts to their pension benefits; and if he will make a statement on the matter. [23829/16]
View answerThe question does not specify the particular measures which the Deputy has in mind. In any event, I am sure he will understand that I would not be in a position to introduce any measures which would benefit the members of a particular pension scheme to the exclusion of other pension scheme members or taxpayers in a similar situation, generally, and I have no plans to do so.
102. Deputy Michael McGrath asked the Minister for Finance the number of residential mortgages here that are classified as sub-prime; the number of sub-prime lenders currently operating in the market; the total value of sub-prime mortgages outstanding; the rate of arrears on these mortgages; the actions specific to the sub-prime sector which are being taken to address arrears; and if he will make a statement on the matter. [23848/16]
View answerThe Central Bank has advised me that it is important to note that there is no such regulated category as "sub-prime lender". However, Retail Credit Firms are authorised to provide credit, in the form of cash loans, directly to individuals (these firms are not licensed to accept deposits). Some firms authorised in this category are mortgage lenders. Retail Credit Firms have been subject to regulation by the Central Bank since 1 February 2008. A register of all Retail Credit Firms is available on the Central Bank website at www.registers.centralbank.ie/DownloadsPage.aspx. In light of their activities, Retail Credit Firms are not subject to the same prudential supervisory regime as licensed credit institutions but are subject to the same Consumer Protection framework requirements, including the Central Bank's statutory Consumer Protection Code and the Code of Conduct on Mortgage Arrears ('CCMA').
The Central Bank's Residential Mortgage Arrears and Repossessions Statistics: Q1 2016, which can be viewed at www.centralbank.ie/polstats/stats/mortgagearrears/Documents/2016q1_ie_mortgage_arrears_statistics.pdf, details figures on 'Mortgage Arrears Repossessions and Restructures of Non-Bank Entities' for both PDH and BTL properties. This group of non-bank entities includes authorised retail credit firms, as well as entities holding mortgage loans that were previously on the balance sheet of Irish resident banks. In Q1 2016 there were 14,443 PDH mortgage accounts in arrears for more than 90 days held by non-bank entities, with an associated outstanding balance of almost €3.17bn, and associated arrears of just over €0.7bn (23 per cent of total outstanding balance). During the same period there were 4,638 BTL mortgage accounts in arrears for more than 90 days held by non-bank entities, with an associated outstanding balance of €1.37bn and associated arrears of €0.45bn (33 per cent of total outstanding balance).
The CCMA sets out requirements for all mortgage lenders dealing with borrowers in arrears or pre-arrears on a mortgage loan which is secured by their primary residence. It provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender and that long term resolution is sought by lenders with each of their borrowers.
The Central Bank engages with Retail Credit Firms in relation to their treatment of borrowers under the Mortgage Arrears Resolution Process (MARP), as provided for in the CCMA. The MARP sets out the steps which lenders must follow, e.g. communicate with the borrower, gather financial information, assess the borrower's circumstances and propose a resolution.
Finally, the Government is committed to working with the Central Bank to ensure that the Code continues to be relevant, fair and balanced in respect of the legitimate interests of debtors and creditors, all the while promoting the availability of sustainable solutions to address genuine mortgage difficulty. This will include the Central Bank conducting an assessment of existing sustainable restructuring solutions across all lenders and non-bank entities operating in Ireland.
103. Deputy Michael McGrath asked the Minister for Finance the progress that has been made in respect of the liquidation of a company (details supplied); if those caught up in outstanding claims are facing any losses; the role of the insurance compensation fund; the role of the Motor Insurance Bureau of Ireland; the estimated number and value of outstanding claims and shortfall; and if he will make a statement on the matter. [23854/16]
View answerThe liquidation of an insurance company is a legally complex process. Setanta is a Maltese incorporated company and, therefore, the Setanta liquidation is being carried out under Maltese law.
Progress in the liquidation of Setanta Insurance has been awaiting the outcome of legal proceedings in the case of the Law Society of Ireland versus the Motor Insurers' Bureau of Ireland (MIBI). On 4th September 2015, the High Court held that the MIBI is liable in respect of claims against the policy holders of Setanta. This decision was appealed by the MIBI and the Court of Appeal upheld the High Court Decision. The MIBI has been granted leave to appeal the decision to the Supreme Court. As this case is sub judice, there are certain matters which I am not in a position to comment on at this time.
However, the Liquidator for Setanta has informed me that:
- The number of open claims was 1,678 as at 31st May 2016.
- The claims reserves position stands at between €87.7 million and €95.2 million.
- The Liquidator reports that it is proving difficult to settle claims in advance of the outcome of the MIBI appeal.
- Final settlements can only be paid out after all of the company's liabilities are quantified, including claims.
- The Liquidator continues to be of the view that he will not be in a position to meet more than 30% of claims.
I expect to be able to provide a more accurate update after the legal proceedings are concluded.
104. Deputy Michael McGrath asked the Minister for Finance if the Central Bank has a policy on whether bank ATM machines should dispense €10 notes to customers; the practice of retail banks here regarding dispensing €10 notes; if there is any policy as to whether the use of €20 notes or €50 notes are preferred where an amount of €100, for example, is required; the breakdown of actual notes dispensed; and if he will make a statement on the matter. [23856/16]
View answerI am informed by the Central Bank that a recommendation contained in the National Payments Plan targeted a significant increase in the number of €10 notes dispensed from ATMs. Targets were designed in order to increase the proportion of €10 notes in circulation with a view to making lower denomination notes available.
The specific targets contained in the National Payments Plan were for a minimum of 4% of all notes by volume distributed from non-retailer ATMs to be €10 notes from Q3 2013; and 5% of all notes by volume to be €10 notes from Q3 2014. This second target represented an increase of around 150% in the number of €10 notes dispensed from ATMs previously. These targets were met by the banks on the dates set, as part of their commitment to the broader goal of improving the efficiency of payments in the National Payments Plan.
Building on the recommendations in the National Payments Plan, the Central Bank has now set targets for the banks to achieve in terms of issuance of €10, €20 and €50 notes from ATMs by 2018. These targets were calculated following a study of the requirements of consumers given patterns of cash usage.
The targets are that 6-10% of all notes by volume are to be €10 notes by the end of 2018, 40-45% of all notes by volume are to be €20 notes and 45-50% of all notes by volume are to be €50 notes. The latest available data, for Q1 2016, on amounts actually dispensed shows that 7% of all notes are €10 notes, 34% of all notes are €20 notes and 59% of all notes are €50 notes.
The Central Bank is working, in co-operation with the commercial banks, towards these targets. This topic is a permanent agenda item at the National Cash Forum which is chaired by the Central Bank, and is also discussed at bilateral meetings with banks by the Central Bank.
By way of additional information, I am also informed by the Central Bank that the commercial banks are in the process of rolling out amended algorithms for their ATM fleet which will provide more choice for customers in relation to the denomination mix of their withdrawals.
105. Deputy Michael McGrath asked the Minister for Finance the number, and overall value, of IBRC principal dwelling house residential mortgages sold by the special liquidator; to provide details of each transaction including the identity of the purchaser; and if he will make a statement on the matter. [23858/16]
View answer106. Deputy Michael McGrath asked the Minister for Finance the number, and overall value, of IBRC buy-to-let mortgages sold by the special liquidator; to provide details of each transaction including the identity of the purchaser; and if he will make a statement on the matter. [23859/16]
View answerI propose to take Questions Nos. 105 and 106 together.
As the Deputy is aware, for operational reasons the loan assets of Irish Bank Resolution Corporation Limited (in Special Liquidation) (IBRC) were divided into eight portfolios: Evergreen, Rock, Salt, Sand/Pearl, Stone, Pebble, Quartz and Amber.
The Sand portfolio originally comprised 12,702 Irish originated residential mortgages with a par value of €1.8bn, most of which had transferred from Irish Nationwide Building Society. Buy to let mortgages accounted for 17% of the original Sand portfolio sold in the Special Liquidation.
Having given due consideration to the representations made by residential mortgage holders of IBRC and professional advice received, 64% of the Sand portfolio was sold to two buyers, namely Lone Star and Oaktree Capital Management, L.P.
Subsequently, the remaining 36% of the unsold residential mortgages from Project Sand were sold as two further sales tranches, Project Pearl Tranche 1 and Project Pearl Tranche 2. The first of these tranches was sold to The Governor and Company of the Bank of Ireland and the second tranche was sold to Mars Capital No. 3 Limited and Mars Capital No. 4 Limited.
107. Deputy Michael McGrath asked the Minister for Finance the amount of money received to date in respect of fees for the 2008 bank guarantee scheme and the eligible liabilities guarantee scheme, proceeds received from the sale of banking-related assets; the current value of the various share holdings the State has in respect of banks; and if he will make a statement on the matter. [23864/16]
View answerAs requested by the Deputy, I can confirm that the following amounts have been received to date from fees relating to deposit guarantee schemes and the disposal of the State's investments in the banks:
- CIFS/ELG - €4.45bn
- Disposal of bank investments -€8.22bn
Proceeds from the disposal of bank investments includes accrued interest/dividend at the date of sale, and is net of €0.23bn from the part-redemption of the AIB preference shares used to settle the remaining balance of the EBS promissory notes.
In addition to these amounts, €1.73bn income has been received to date in the form of coupons on the various bank investments.
The most recent independent valuations of the State's remaining investments in the banks are as follows:
|
Bank |
Most recent valuation |
Source of valuation |
|
AIB Equity CoCos |
€12.2bn €1.6bn |
ISIF, 31 December 2015 At par |
|
BOI Equity |
€0.84bn |
ISE close, 18th July |
|
PTSB Equity |
€0.67bn |
ISE close, 18th July |
|
Total |
€15.31bn |
The most recent valuation for AIB was completed by the ISIF for the NTMA accounts to 31 December 2015 and does not include the impact of factors which, since the start of 2016, have significantly reduced the valuation of European-wide bank stocks. Although AIB is quoted on the ISE, this is not regarded as a reliable indicator of valuation given the very small free float. The AIB CoCos are due for repayment on 28 July when the State will receive total proceeds of €1.76bn including accrued interest of €160m.
108. Deputy Michael McGrath asked the Minister for Finance if the Central Bank has issued any guidance to financial institutions in terms of assessing loan applications on the issue of considering evidence of gambling transactions on the bank statements of persons who have applied to the institution for a loan; and if he will make a statement on the matter. [23865/16]
View answerI have been informed by the Central Bank that it has not issued any guidance to financial institutions on the consideration of evidence of gambling transactions as part of the loan application process.
The decision to grant or refuse credit is a commercial decision on the part of a regulated entity that must be conducted in accordance with applicable requirements of Irish financial services legislation. These include requirements to conduct a proper creditworthiness assessment.
As I previously said in relation to a similar question last year (Question No. 263 of 30 June), prior to offering a product or service, a regulated entity must gather and record sufficient information from the consumer appropriate to the nature and complexity of the product or service and must carry out an assessment of affordability to ascertain the personal consumer's likely ability to repay the debt over the duration of the agreement, in accordance with the requirements of the Consumer Protection Code 2012.
109. Deputy Michael McGrath asked the Minister for Finance the amount of fees paid to barristers, both senior and junior counsel, by IBRC since the appointment of the special liquidators; the name and amount paid to each recipient; and if he will make a statement on the matter. [23866/16]
View answerI am advised by the Special Liquidators of IBRC that they do not believe that it would be appropriate to provide the requested details regarding all Counsel engagements by IBRC since their appointment in February 2013 given the legally privileged, commercially sensitive and highly confidential nature of those engagements.
While the multitude of unprecedented, exceptional and novel issues and challenges faced by the Special Liquidators of IBRC in fulfilling its wind down and recovery mandate necessitates expenditure on appropriate legal and professional advice, they have advised me that they remain extremely mindful of the imperative to control legal costs.
The Legal fees incurred in the Liquidation are included as part of Other Legal Advisors Costs as published in the most recent Progress Report Update issued by the Special Liquidators on 27 May 2016 which is available on the Department of Finance website through the following link:
www.finance.gov.ie/sites/default/files/Progress%20update%20report_31%20Dec%202015.pdf
110. Deputy Michael McGrath asked the Minister for Finance if, following its appointment, the special liquidator of IBRC changed the interest rates being charged by the bank on any commercial loans; and if he will make a statement on the matter. [23867/16]
View answerThe Special Liquidators are in the process of compiling a response to this question which I will forward to the Deputy at the earliest opportunity.
Given that IBRC is going through a liquidation process, the ability to collate and report information of this detail in such a short period of time is not as feasible as it would be for a bank that is not in wind-down. The Special Liquidators have advised that the delay in issuing the response is due to the information not being readily available on the systems that are being used in the bank and that manual collation of the information is required.
111. Deputy Michael McGrath asked the Minister for Finance the number and value of commercial loans being charged at interest rates (details supplied) at the date of the appointment of the special liquidator in respect of IBRC, as at 31 December 2014, 31 December 2015 and to date; and if he will make a statement on the matter. [23868/16]
View answerThe Special Liquidators are in the process of compiling a response to this question which I will forward to the Deputy at the earliest opportunity.
Given that IBRC is going through a liquidation process, the ability to collate and report information of this detail in such a short period of time is not as feasible as it would be for a bank that is not in wind-down. The Special Liquidators have advised that the delay in issuing the response is due to the information not being readily available on the systems that are being used in the bank and that manual collation of the information is required.
112. Deputy Michael McGrath asked the Minister for Finance the procedure in place, from the date of nationalisation and, if different, from the date of the appointment of the special liquidator, for the setting and changing of interest rates on specific commercial loans in respect of IBRC; and if he will make a statement on the matter. [23869/16]
View answerAs the Deputy is aware, the ongoing Commission of Investigation in relation to IBRC is investigating all transactions, activities and management decisions, other than those relating solely to the acquisition of assets by the National Asset Management Agency, which occurred between 21 January 2009 (being the date of the nationalisation of IBRC) and 7 February 2013 (being the date of the appointment of the Special Liquidators to IBRC). As part of this, the Sole Member will investigate whether the interest rates or any extension to interest rates or any periods for repayments were given by IBRC on preferential terms that were unduly favourable to any borrower, where those interest rates resulted in a differential of more than €4 million in interest due over the standard applicable interest rates for loans of that nature or where the amendments give rise to or are likely to give rise to potential public concerns.
Both Houses of the Oireachtas approved these terms of reference in June 2015. It is important that I do not interfere with or prejudice the important work to be conducted by the Commission of Investigation. In these circumstances it would be inappropriate for me to comment publicly in respect of the various transactions, management decisions and actions that may fall within the scope of the review.
113. Deputy Michael McGrath asked the Minister for Finance the number of rent receivers appointed to date in respect of buy-to-let properties for each of the State-supported banks; the number of buy-to-let properties affected by such appointments; the number of rent receivers expected to be appointed over the remainder of 2016; the detail of the operation of the rent receivers; the impact on the tenants concerned; if the Government has any policy on the appointment of rent receivers; and if he will make a statement on the matter. [23874/16]
View answerI have received the following information in relation to rent receivers:
AIB
AIB has appointed rent receivers for over 112 assets to date in 2016 of which c. 65 are buy to let. In total, AIB has c.1,550 assets under active rent receiver management of which c.900 are buy to let properties.
AIB cannot anticipate the number of receivers that will be appointed for the remainder of 2016 as it is dependent on borrower cooperation in reaching sustainable solutions. Rent receivers are usually appointed over assets where borrowers are in default and where the rent being generated from the asset is not being paid to the Bank in reduction of debt outstanding as contracted. The rent receiver collects the rent on behalf of the bank and seeks to maximise the value of the asset. In relation to impact on tenants, the receiver may decide to sell the property with the tenant in situ or alternatively it may be sold with vacant possession. AIB ensures that the receiver acts in compliance with statutory duties and with all of the relevant laws and codes as they relate to private residential tenancies."
PTSB
PTSB have informed me that they have appointed Rent Receivers to 404 buy-to-let properties and estimate that up to 50 additional properties may be passed to rent receivers over the course of 2016. They note that a rent receiver is appointed by the bank and operates as an agent of the borrower, collects rent from the tenant(s) and directs it to the borrowers mortgage account, together with attending to any property related issues the tenant may have, in accordance with the lease agreement.
PTSB have further informed me that it is their desire that the existing tenant(s) once they are paying rent, remain in the property where possible.
BOI
In the case of Bank of Ireland the bank has provided information in relation to rent receivers in its Annual Report for the year ended 31 December 2015 which can be found at
https://investorrelations.bankofireland.com//wp-content/assets/BOI-Annual-Report-2015.pdf
114. Deputy Michael McGrath asked the Minister for Finance the gross amount of corporation tax paid in each year from 2011 to 2015 by the top ten multinational firms as measured by corporation tax paid; the proportion this represents of overall corporation tax paid in each year; and if he will make a statement on the matter. [23875/16]
View answerI am informed by Revenue that the gross Corporation Tax paid from 2011 to 2015 by the top ten companies, based on the amount of tax paid (all of which are multinational companies), and the proportion this represents of overall gross Corporation Tax paid in each year, are as set out in the following table.
|
Year |
Gross Amount Paid in Corporation Tax by Top Ten Payers (€m) |
% of Gross Corporation Tax Receipts |
|
2011 |
1,426 |
32.1 |
|
2012 |
1,423 |
28.3 |
|
2013 |
1,561 |
31.4 |
|
2014 |
1,729 |
32.7 |
|
2015 |
2,801 |
36.6 |
115. Deputy Michael McGrath asked the Minister for Finance the current book value and estimated market value of the loan assets currently held by NAMA; a breakdown by geographic area, for example, Ireland, the UK and so on; if a decision has been made to accelerate the disposal of the NAMA assets; and if he will make a statement on the matter. [23876/16]
View answer123. Deputy Michael McGrath asked the Minister for Finance the current status of the planned wind-up of NAMA; the details of the portfolio that is remaining; the estimated timeframe; the financial outturn from the wind-up of NAMA; and if he will make a statement on the matter. [23886/16]
View answerI propose to take Questions Nos. 115 and 123 together.
Details on NAMA's remaining portfolio are available in the Agency's Annual Report and Financial Statements for 2015. This is published on the NAMA website, www.nama.ie. Regarding the current book value, estimated market value, and geographic breakdown of the remaining portfolio, I would refer the Deputy, in particular, to page 35 of the 2015 Annual Report and Financial Statements (https://www.nama.ie/fileadmin/user_upload/5078_NAMA_AR2015_English_screen-FINAL.pdf) and page 67 of the associated presentation: https://www.nama.ie/fileadmin/user_upload/2015_Annual_Report_presentation_-_FINAL_08.06.16_for_website.pdf.
NAMA expects that it will have redeemed all of its senior debt by 2018 and that its focus over the period from 2018 will be on completing its Docklands and residential funding programmes. NAMA expects to repay its subordinated debt in March 2020. While the Docklands SDZ and Residential Funding Programmes will continue beyond the likely redemption of NAMA's Senior Notes currently expected by 2018, they are not expected to extend NAMA's life beyond 2020.
NAMA's most recent projections indicate that, after repayment of senior and subordinated debt, its terminal surplus will range between €1.6 billion and €2.3 billion.
116. Deputy Michael McGrath asked the Minister for Finance the amount and purpose of public funding that has been required to date by the credit union sector; the amount collected from credit unions by way of the levy; and if he will make a statement on the matter. [23877/16]
View answerThe Credit Institutions Resolution Fund (the Fund) was established under Section 10(1) of the Central Bank and Credit Institutions (Resolution) Act 2011 (2011 Act).
In December 2011 the Minister contributed €250m to the Fund.
The 2011 Act sets out the purpose of the Fund as follows:
The purpose of the Fund is to provide a source of funding for the resolution of financial instability in, or an imminent serious threat to the financial stability of an authorised credit institution, and in particular-
1. To reimburse the Minister for any provision of a financial incentive pursuant to section 46;
2. To provide funds for any payment required pursuant to section 37(1), 42(5), 48 or 98;
3. With written consent of the Minister, to provide capital for a bridge-bank; and
4. To meet the Bank's expenses in discharging its functions under this Act.
To date approximately €30m has been used to support resolution actions in the credit union sector. To date levies collected from credit unions amount to €23.2m.
Separately, the Credit Union Fund was established under Section 57 of the Credit Union and Co-operation with Overseas Regulators Act 2012 (2012 Act). The purpose of the Fund is primarily to provide a source of funding for the restructuring of credit unions under the Credit Union Restructuring Board (ReBo). The Minister for Finance contributed €250 million to the Credit Union Fund. To date approximately €10.98m has been drawn from the Credit Union Fund and levies collected to date amount to approximately €2.82m.
117. Deputy Michael McGrath asked the Minister for Finance if he will set out specifically the initiatives which have been undertaken by the Central Bank of Ireland that will ensure development and growth of the credit union sector in recent times in view of the Registrar of Credit Unions remit to maintain the financial stability and wellbeing of credit unions; and if he will make a statement on the matter. [23878/16]
View answerMy role as Minister for Finance is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.
The Registrar of Credit Unions at the Central Bank is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.
While it is important to distinguish this division of roles, it is equally important to recognise that both the Registrar of Credit Unions and the Minister for Finance work together for the safety of members' savings and the security of the credit union sector.
The Registrar recognises the strategic challenges facing the sector, the need to revitalise business models and find ways of doing business to better serve members, delivering on their expectations. The Registrar is committed to engaging with credit unions on their business model development proposals. As part of that engagement process, the Central Bank established Sector Stakeholder Dialogues in November 2015 to facilitate engagement with credit unions. This is with a view to gaining a better understanding of how credit unions want to develop their business model and to identify any changes that may be required to the regulatory framework to facilitate prudent development. Since the establishment of the Sector Stakeholder Dialogues five meetings have taken place.
To date the focus of the group has been on a number of areas including:
- Longer term lending;
- Additional services framework; and
- Publication of sectoral data.
The group has identified co-ordinators for each of the areas and work is progressing. In the area of lending, the group is discussing objectives for credit unions in relation to longer term lending and the potential impact of current longer term lending limits. As a first step to making the longer term lending limits more usable, the Registrar has proposed to undertake work on potential changes to the conditions attaching to approvals for existing longer term lending limits, which were originally developed in 2007. Some initial proposals on how the conditions could be amended have been put forward for discussion within the group. Members of the group have undertaken to carry out some analysis on the impact of such proposals on individual credit unions and report back to the group.
In relation to additional services, the development of guidance on the application process for additional services is under consideration with a view to developing and publishing guidance material for credit unions. In relation to sectoral data, the group is considering the type and format of data that could be published on a regular basis by the Registrar.
The dialogues will continue over the coming months with the next meeting scheduled to take place before the end of July.
Furthermore, Regulations made by the Central Bank of Ireland (the Central Bank); the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016, which were commenced on 1 January 2016, make specific reference to section 43 of the Act and to the further classes of investments in which a credit union may invest its funds which may include investments in projects of a public nature. The Regulations provide that investments in projects of a public nature include, but are not limited to, investments in social housing projects.
In addition to these measures, the Credit Union Advisory Committee (CUAC) made a number of recommendations in its recent report presented to me on 29 June 2016. It is expected that these recommendations when implemented will support credit unions in developing their business models, particularly recommendations around tiered regulation and the review of Section 35. I will be establishing an Implementation Group to facilitate and oversee implementation of CUACs recommendations.
118. Deputy Michael McGrath asked the Minister for Finance the number of credit unions currently operating under lending restrictions; the number of credit unions with restrictions on lending to individuals and aggregate monthly lending in bands of €10,000; and if he will make a statement on the matter. [23879/16]
View answerI have been informed by the Central Bank that 26% of credit unions are operating under lending restrictions.
Almost all credit unions with a lending restriction in place have a maximum individual loan size restriction. In the majority of cases, the maximum individual loan size is in excess of €10,000 as detailed in the following table.
|
Lending Restriction on Individual Loans |
Number of Credit Unions |
|
10,000 |
8 |
|
>10,000 and 20,000 |
36 |
|
>20,000 and 30,000 |
25 |
|
>30,000 and 40,000 |
3 |
|
>40,000 and 50,000 |
3 |
|
>50,000 and 60,000 |
- |
|
>60,000 and 70,000 |
- |
|
>70,000 and 80,000 |
- |
|
>80,000 and 90,000 |
- |
|
>90,000 and 100,000 |
1 |
|
Total |
76 |
There are 13 credit unions that have a monthly maximum lending restriction imposed.
In February 2015 the Central Bank commenced a lending restriction review initiative, whereby credit unions subject to a lending restriction that are satisfied they have made the necessary improvements and have embedded these improvements in robust risk sensitive lending practices, could apply for a review of their lending restriction. The closing date for receipt of applications to review lending restrictions under this initiative was 30 September 2015.
Currently approximately 26% of credit unions have a lending restriction compared with 52% at the start of the review process.
119. Deputy Michael McGrath asked the Minister for Finance the number of credit unions which have been approved and declined respectively for additional services in the past five years; the number of applications ongoing; and the length of time it takes on average from preliminary application stage to full approval. [23880/16]
View answerThe Credit Union Act, 1997 (the 1997 Act) and the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (which set out services exempt from additional services regulations) set out the services that a credit union may provide to its members. These include loans; savings; account access by phone; account access by internet; third party payments (including EFT); ATM services; bureau de change; certain insurance services on an agency basis; group health insurance; bill payment; money transfers; standing orders; direct debits; financial counselling; PRSAs on an introduction basis and insurance on an introduction basis. Where a credit union wishes to provide services to its members, other than those services that are provided for under the 1997 Act, an application may be made to the Central Bank for approval to provide such additional services in accordance with the provisions set out in sections 48-51 of the 1997 Act. As set out in communications to the sector the Central Bank is, in principle, supportive of credit unions developing additional services. The Central Bank will consider proposals from credit unions on new additional services they wish to provide to members where the credit union can demonstrate that:
- the proposed additional service is supported by a robust business case;- the proposed additional service is not contrary to financial services legislation;- the board of directors has a sound appreciation of the nature of the additional service proposed and is fully informed of the strategic, governance, risk management, operational, financial and legal implications involved; and- systems and controls are in place to ensure any risks involved in the provision of the additional service are managed and mitigated. As set out above credit unions can apply to the Central Bank for approval to provide such additional services in line with sections 48-51 of the 1997 Act. I have been informed by the Central Bank that in the last five years, five applications for additional services have been approved, no applications have been declined and there are currently seven applications in progress. I have been further informed by the Central Bank that the timescale from preliminary application stage to full approval depends on the quality of information provided. Where the application form has been fully completed and contains or includes all of the information requested, the Central Bank endeavours to turn around the application as quickly as possible.
120. Deputy Michael McGrath asked the Minister for Finance the additional services most frequently requested by credit unions; the number of inquiries which relate to an application for provision of debit card services; and the number of applications for debit cards which have been approved in the past five years. [23881/16]
View answerMy role as Minister for Finance is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.
The Registrar of Credit Unions at the Central Bank is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.
The Credit Union Act, 1997 (the 1997 Act) and the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (which set out services exempt from additional services regulations) set out the services that a credit union may provide to its members. These include loans; savings; account access by phone; account access by internet; third party payments (including EFT); ATM services; bureau de change; certain insurance services on an agency basis; group health insurance; bill payment; money transfers; standing orders; direct debits; financial counselling; PRSAs on an introduction basis and insurance on an introduction basis. Where a credit union wishes to provide services to its members, other than those services that are provided for under the 1997 Act, an application may be made to the Central Bank for approval to provide such additional services in accordance with the provisions set out in sections 48-51 of the 1997 Act. As set out in communications to the sector the Central Bank is, in principle, supportive of credit unions developing additional services. The Central Bank will consider proposals from credit unions on new additional services they wish to provide to members where the credit union can demonstrate that: the proposed additional service is supported by a robust business case; the proposed additional service is not contrary to financial services legislation; the board of directors has a sound appreciation of the nature of the additional service proposed and is fully informed of the strategic, governance, risk management, operational, financial and legal implications involved; and· systems and controls are in place to ensure any risks involved in the provision of the additional service are managed and mitigated. As set out above credit unions can apply to the Central Bank for approval to provide such additional services in line with sections 48-51 of the 1997 Act. Credit unions wishing to provide debit cards should engage with the Registrar of Credit Unions to discuss their proposals. I have been informed that the Central Bank has been clear in its recent engagement with credit unions and other stakeholders who are seeking to offer debit cards that this service must be supported by the appropriate payment account service. Consequently, the Central Bank has recently worked with a group of credit unions on the development of full payment account services which will result in an approved additional service, including a payment account broadly analogous to a bank personal current account which appropriately supports payment instruments such as debit cards. This service is subject to application and formal approval by the Registrar of credit unions as an additional service.
The most frequently applied for services are insurance services on an introduction basis and provision of full service payment accounts. Since 1 January Insurance Services on an introduction basis have been included as a service exempt from additional services requirements under Part 9 of Credit Union Act 1997 (Regulatory Requirements) Regulations 2016. The Central Bank has further informed me that while no credit union has been approved to provide debit cards over the past five years, it is currently progressing a number of applications for a full service payment account which would support payment instruments such as debit cards.
