Thursday, 12 December 2019

Questions (51)

Éamon Ó Cuív

Question:

51. Deputy Éamon Ó Cuív asked the Minister for Finance the investment by the State in credit unions during the financial crisis; the amount recouped to date; the value of residual investment by the State in the credit unions; and if he will make a statement on the matter. [52289/19]

View answer

Written answers (Question to Finance)

To answer the Deputy's question there has been no investment by the State in credit unions during the financial crisis.

However, my Department put in place a number of financial measures, supported by Exchequer funds, to assist the credit union sector since 2011. These measures include:

- establishment of the Credit Union Restructuring Board (ReBo) supported by the availability of €250 million in the Credit Union Fund for voluntary restructuring of credit unions facilitated by ReBo; and

- availability of €250 million for resolution purposes to ensure the safety of members’ savings.

The Credit Union Fund

The Credit Union Fund was established under the Credit Union and Co-operation with Overseas Regulators Act 2012 (2012 Act) primarily to provide a source of financial support for the restructuring of credit unions under ReBo.

The Government provided €250m? to the Credit Union Fund specifically for restructuring, approximately €22.6m of which was drawn down. €11m of funding was provided by the sector through levies from 2014-2017, which resulted in a net cost to the fund of €11.6m.

On 28 November 2018, €238m was returned to the exchequer leaving approximately €0.4m in the fund which will be transferred to the exchequer following formal dissolution of ReBo. Legislation formally dissolving ReBo is expected to be finalised shortly.

Resolution Fund

The Credit Institutions Resolution Fund (CIRF) was established under the Central Bank and Credit Institutions (Resolution) Act 2011 (2011 Act). In December 2011, the Minister for Finance contributed €250m to the CIRF. On 29 November 2018, at my request, the CIRF repaid €240m leaving an outstanding balance due to the exchequer of €10m. To date circa €30m has been used to support resolution actions in the credit union sector.