Dáil Éireann Debate, Wednesday - 21 April 2021
461. Deputy Duncan Smith asked the Minister for Finance if his attention has been drawn to the problems community groups and resident associations are having in opening new accounts in financial institutions to avail of local authority grants (details supplied); the plans in place to solve these problems; and if he will make a statement on the matter. [18178/21]
View answerFirstly, I would like to point out that it would not be appropriate for the Minister for Finance to comment on specific policies in individual credit unions. In addition, the Central Bank as regulator of the credit union sector cannot comment on specific matters in individual credit unions due to confidentiality reasons. The Central Bank has also informed me that they do not contact individual credit unions seeking answers as to why they have decided to discontinue the provision of a particular financial service.
You may wish to note that credit unions in Ireland are regulated and supervised under the Credit Union Act, 1997 and regulations issued by the Central Bank. Credit unions must also comply with other legislation, such as the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (CJA 2010).
The Central Bank has developed and published the Credit Union Handbook to assist credit unions by bringing together in one place the legal and regulatory requirements and guidance that apply to credit unions, arising from their registration as credit unions. Where an individual credit union intends to discontinue a service, the Central Bank expects that the credit union would give reasonable notice to affected members.
It is important to note that it is a commercial decision for a credit union as to whom it decides to provide financial services to. The Central Bank cannot direct a credit union as to what types of commercial decisions it can and cannot take, provided of course that the credit union complies with all applicable legal and regulatory obligations pertaining to its registration. Furthermore, the Central Bank cannot ask a credit union not to comply with its own anti-money laundering/countering the financing of terrorism (AML/CFT) policies and procedures, which the credit union has put in place in order to comply with its obligations under the CJA 2010.
However, credit unions should not discontinue the provision of financial services to entire membership categories without due consideration. In September 2019, the Central Bank published its Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector (the “Guidelines”). In the Guidelines, the Central Bank clearly set out its expectations of firms (including credit unions) when applying the risk-based approach to their AML/CFT obligations, including that “Firms should be cognisant of the importance and benefits of financial inclusion. A “zero tolerance” approach, or wholesale termination of business relationships with entire categories of customers, without an individual assessment of their risk, is not consistent with the risk-based approach.”
