Dáil Éireann Debate, Thursday - 30 March 2017
142. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 76 of 29 September 2016, if he will clarify the meanings when he states that no concrete business model development proposals have been received; if proposals, concrete or otherwise, have been made; if any of these proposals requested a change to current regulations; if so, the outcome of these proposals; and if he will make a statement on the matter. [15969/17]
View answerI have been informed by the Central Bank that it engages with credit unions wishing to expand the range of products and services they provide to their members but that it is clear that the ownership of business model development in credit unions rests with individual credit unions themselves. This engagement is framed in the context of the Credit Union legislation. The majority of products and services that credit unions wish to offer are accommodated within that legislation and require no additional approval from the Registry. However if approval is required it is a matter for the Registrar of Credit Union at the Central Bank. The important considerations for credit unions are that they understand the nature of the risks involved in any new product or business line, the financial implications in terms of overall return on assets and product investment, that they have the necessary control and governance framework to oversee their business. The Registry of Credit Unions does not publish details of bilateral applications.
Recent developments in business model evolution are social housing investments which requires amendment to Regulations as provided for under Section 43 (2)(c). The Central Bank will shortly issue a consultation paper on proposed changes to the regulations expanding the list of eligible investments.
Longer term lending engagement has centered around mortgages and changes to longer term lending limits which would require amendement to Regulations. The Central Bank informs me that it has yet to receive any concrete proposals around such changes. The Central Bank has indicated it is prepared to review longer term lending limits and has highlighted asset and liability management, funding profile and funding sources as areas for consideration in developing such proposals. This review is in line with the Credit Union Advisory Committee (CUAC) recommendation of a full review of s35 lending limits and concentration limits. Further work is being undertaken in this area by the Implementation Group established to implement the CUAC recommendations.
Services or products not accommodated within the existing legislation and regulation can be applied for under the Additional Services Framework under sections 48 to 52 of the Credit Union Act 1997. In relation to current account services including payment instruments such as debit cards, the Registrar of Credit Unions recently approved six credit unions that applied for and were approved for this new business line. The Central Bank is currently reviewing a number of additional applications for this service.
