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Financial Services Regulation

Dáil Éireann Debate, Wednesday - 1 February 2012

Wednesday, 1 February 2012

Ceisteanna (43)

Caoimhghín Ó Caoláin

Ceist:

41 Deputy Caoimhghín Ó Caoláin asked the Minister for Finance, following on from the intervention by the Registrar of Credit Unions at Newbridge credit union last month, if any future interventions will be part of a wider restructuring plan for the credit union movement developed in conjunction with the credit unions, or if they will be led by the Financial Regulator’s office. [5657/12]

Amharc ar fhreagra

Freagraí scríofa

The Government established the Commission on Credit Unions, which includes credit union stakeholders, to review the future of the credit union movement and make recommendations in relation to the most effective regulatory structure for the sector. The Commission is to take into account credit unions' not-for-profit mandate, their volunteer ethos and community focus, while paying due regard to the need to fully protect depositors' savings and financial stability.

The Commission on Credit Unions submitted its Interim Report to me at the end of September 2011, which deals with Phase 1 of the Commission's work regarding the strengthening of the regulatory framework for credit unions including more effective governance and regulatory requirements. The final report of the Commission on Credit Unions is due to be submitted to me by the end of March and I expect that it will deal with the remaining issues in the Commission's terms of reference, including restructuring. I do not propose to bring forward proposals on restructuring of credit unions until I have had the benefit of considering the Commission's recommendations.

The Commission on Credit Unions has recommended that the resolution powers granted to the Central Bank under the Central Bank and Credit Institutions (Resolution) Act 2011 should be considered for those credit unions that meet the intervention conditions. Under the Act the Central Bank may take certain resolution actions where the intervention conditions under the Act are satisfied. To date, the only resolution action taken has been in the case of Newbridge Credit Union where a Special Manager was appointed to undertake a review of the Credit Union with a view to ascertaining its financial position and to develop a plan to restore the institution's financial position considering all available options.

Under the Act, initiation of further resolution interventions is a matter for the Central Bank. In considering any such action, the priority for the Central Bank is to protect members of credit unions and their savings, the financial stability of credit unions and the sector overall.

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