Written Answers. - Credit Unions.
Ruairí Quinn
Ceist:
44
Mr. Quinn
asked the
Tánaiste
and Minister for Enterprise, Trade and Employment if her attention has been drawn to the difficulties created for smaller credit unions by the significant increase in the filing fee charged by the Registrar of Friendly Societies when credit unions submit their annual returns; if her attention has further been drawn to the fact that, in some cases, this has led to a tenfold increase in the filing fee; if the increases were approved by her; and if she will make a statement on the matter.
[21989/99]
In approving the text of the Credit Union Bill in December 1996, the then Government decided that an additional amount of £150,000 per annum in credit union fees should be raised to meet the additional staff costs involved in the implementation of the Act. At the time, annual fee income earned by the Registrar of Friendly Societies amounted to just £28,000, a small fraction of the cost of credit union regulation borne by the State and the taxpayer.
After the enactment of the Credit Union Act, 1997, our Department prepared a consultation paper on options for a new credit union fees structure and circulated it for comment to the Registrar, the Irish League of Credit Unions, the Credit Union Advisory Committee and other credit union interests. This paper was based on the premise that annual credit union fee income would have to rise by £150,000.
Having considered the comments received, the Tánaiste and Minister for Enterprise, Trade and Employment signed the Credit Union Act, 1997 (Fees) Regulations, 1998 in May 1998. These regulations, which were effective from 1 June 1998, replaced and substantially rationalised many of the different fee values contained in the previous fees regulations which operated from 1 February 1995. In fact, ten of the 20 fee values set out in those regulations were reduced, five remained the same and only five were increased.
However, the most significant change was in the annual return fee payable by credit unions to the registrar. While this had been a flat fee of £50 per annual return, the new fee amounts to 0.01%. of the total assets of the credit union as specified in its annual return. While I acknowledge that this new structure represents a substantial fee increase for a number of larger credit unions, the new fee is actually more equitable in that it relates the fee payable to the credit unions' asset size and their ability to bear the additional cost.
I have met the Irish League of Credit Unions on this issue on a number of occasions, but despite enjoying the benefits of the Credit Union Act, the league has never accepted that part of the 1996 Government decision which required the generation of an additional £150,000 in fee income. I fully support the previous Government's decision, as I believe that it is only fair that credit unions, based on their ability to pay, should contribute a reasonable sum to the costs of State supervision of the movement.
I understand that there may be a belief on the part of some credit unions that the fees outlined in the 1998 regulations have been revoked or suspended. This is not correct; the stipulated fees must be fully paid under the law. I accordingly urge all credit unions to meet their statutory obligations and pay to the registrar the appropriate asset-based fee with their 1999 annual returns, together with any shortfall which may exist from 1998.
