Dáil Éireann Debate, Tuesday - 8 March 2022
213. Deputy Holly Cairns asked the Minister for Finance the number of credit unions which have closed and or amalgamated with other credit unions since 1 January 2010 annually; and if he will make a statement on the matter. [13130/22]
View answer214. Deputy Holly Cairns asked the Minister for Finance the policy and regulatory framework that has required credit unions to amalgamate with other credit unions; and if he will make a statement on the matter. [13131/22]
View answerI propose to take Questions Nos. 213 and 214 together.
The Central Bank informs me that the total number of individual, actively trading credit unions has decreased from 415 as at 1st January 2010 to 210 as at 4th March 2022, a reduction of 205.
This decrease has been driven in the significant majority of cases by the completion of voluntary transfers of engagements (TOEs).
TOEs are completed in accordance with legislative requirements set out in the Credit Union 1997 (as amended). The Central Bank has published guidance on TOEs and has included a section devoted to TOEs in the Credit Union Handbook.
A total of 190 credit unions transferred their engagements over the period 1st January 2010 to 4th March 2022. Of the 190 transfers, 82 were aided by the Credit Union Restructuring Board, which operated from 2013 to 31 July 2017.
A transfer of engagements is a voluntary process whereby an individual credit union (a transferor) transfers all of its assets, liabilities and undertakings to another credit union, typically within the proximate geographical area. This ensures the continued availability credit union services in the transferor’s common bond.
The Thematic Review of Restructuring in the Credit Union Sector, published by the Central Bank in February 2019, found that while the number of registered credit unions had reduced by 35% from 30 September 2013 to 30 September 2018, there was only an 8% reduction in business locations operated by credit unions over that period of time. The Review also found that in the 77% of transfers completed between those dates, no business locations had closed as a result of the completion of a transfer.
The remaining decrease in the numbers of credit unions is attributable to eight voluntary dissolutions, whereby a credit union chooses to cease trading and discharge its assets, liabilities and reserves, and seven resolution actions. Each of these resolution actions was initiated by the Central Bank against extremely distressed and weakened credit unions in circumstances where no voluntary solution could be achieved.
Although there is legislation and guidance in relation to how a credit union must/should complete a voluntary transfer of engagement process, there is no policy and regulatory framework that requires a credit union to amalgamate with another credit union.
