My 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.
Credit unions are regulated and supervised by the Registrar of Credit Unions at the Central Bank who is the independent regulator for credit unions. Within his 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.
I have been informed by the Central Bank that in the feedback statement to CP88 'Consultation on Regulations for Credit Unions on commencement of the remaining sections of the 2012 Act' it outlined that having considered the feedback received the Bank was of the view that an individual members savings limit of €100,000 is appropriate given the stage of development of the sector and the Central Bank’s mandate to ensure the protection of members’ funds by credit unions and safeguarding the stability of the sector.
The Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (the Regulations) came into effect on 1 January 2016. These Regulations set out an individual member savings limit of €100,000. The Regulations introduced on 1 January 2016 also provided that credit unions could apply to the Central Bank to retain individual members’ savings in excess of €100,000, which were held at commencement of the Regulations and that credit unions with total assets in excess of €100 million can apply to the Central Bank for approval to increase individual member savings in excess of €100,000.
The Central Bank developed an application processes to facilitate credit unions in seeking the two types of approvals outlined above. As provided for in the Regulations, in order for approval to be granted an applicant credit union must have demonstrated that the granting of such approval is consistent with the adequate protection of the savings of members and effective and proportionate regulation having regard to the nature, scale and complexity of the credit union. The submission deadline for applications to retain savings in excess of €100,000 was 27 June 2016. The application form to increase savings in excess of €100,000 does not have a submission deadline and will be accepted from individual credit unions with assets over €100 million on an ongoing basis.
In the feedback statement to CP88 the Central Bank also committed to undertaking a review of the continued appropriateness of the savings limit within three years of the introduction of the 2016 Regulations. The Central Bank envisages that it will commence such a review by year end 2019.
The Deputy might also wish to note that in line with Programme for a Partnership Government commitments, the Department of Finance requested the Central Bank to review the continued appropriateness of the savings limits on Credit Union members, and additionally following engagement the Central Bank accepted Department of Finance observations regarding simplification of the application process to retain Credit Union members’ savings in excess of €100,000.