Dáil Éireann Debate, Tuesday - 15 June 2021
386. Deputy Brian Stanley asked the Minister for Finance the extent of the restrictions on credit unions regarding the amount a customer can have on deposit; the purpose of the restrictions; and if this will be permanent. [31839/21]
View answerCredit unions in Ireland are regulated and supervised under the Credit Union Act, 1997 (the 1997 Act) and regulations issued by the Central Bank, which set out the framework for the registration, regulation and operation of credit unions including detailed governance requirements and prudential requirements on items such as reserves, liquidity, investments, member savings and lending.
Limits on credit union savings
The Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (the 2016 Regulations) set an individual savings limit of €100,000 that applies on a per member basis. Individual 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 2016 Regulations. In addition, on an ongoing basis, 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 introduction of the savings limit by the Central Bank followed a public consultation, CP88 - Consultation on Regulations for Credit Unions on commencement of the remaining sections of the 2012 Act .
In 2020, the Registry of Credit Unions completed a review of the continued appropriateness of the €100,000 individual member’s savings limit which concluded that the limit remains appropriate.
Savings limits/caps imposed by individual credit unions
Separate to the limits set out by the Central Bank in the 2016 Regulations, individual credit unions may decide to set individual savings limits/caps, which are below the €100,000 limit contained in the 2016 Regulations, in order to take account of their own specific business requirements and strategy.
It is a commercial decision for any individual credit union in terms of any such limits placed on the level of member savings or any decision to return some member savings - where they are of the view that this will best support the ongoing operation of their credit union for their members.
The Central Bank’s "Financial Conditions of Credit Unions" publication - 6th Edition (December 2019) includes some analysis on credit union savings, incorporating information on savings caps and responses from credit unions to a questionnaire that was issued by the Central Bank in 2019 (see Box B on pages 11 and 12 of the publication).
Savings restrictions for individual credit unions
There are currently no savings restrictions put in place by the Central Bank for any individual credit union.
