Michael Healy-Rae
Ceist:48 Deputy Michael Healy-Rae asked the Minister for Finance the position regarding the closure of credit unions (details supplied); and if he will make a statement on the matter. [20717/12]
Amharc ar fhreagraWednesday, 25 April 2012
Ceisteanna (49)
Freagraí scríofa
The Commission on Credit Unions submitted its Final Report to me on schedule at the end of March and it was published last week. The Report incorporates the recommendations of the Commission's Interim Report, published in October 2011, with regard to deposit protection, resolution, stabilisation, and liquidity. The key recommendations in the Final Report relate to restructuring, the proposed new legislative and regulatory framework, and new governance requirements for credit unions.
I welcome the Report and I have complimented the Commission on its in-depth analysis and far-reaching recommendations that will mark a fundamental turning point in the development of the credit union movement in Ireland.
Contrary to the reports referred to by the Deputy, the Commission does not recommend the closure of credit unions. A core recommendation is that the credit union sector should be restructured on a voluntary, incentivised and time-bound basis. The guiding aims of restructuring are: the protection of credit union members' savings; the stability and viability of credit unions and the sector at large; and the preservation of the credit union identity and ethos.
The Report states that the objective of the restructuring process is to provide the opportunity for stronger credit unions to develop a more sophisticated — and ultimately more sustainable — business model and provide a mechanism to sort through the financial stresses in the sector in an orderly way. The Report also points out that in the absence of a policy intervention to restructure credit unions, there is the risk that problems will unwind over an extended period and in a way that erodes member and public confidence in the sector and which increases the risk of costly resolutions and liquidations. However, the Commission does recommend that the resolution powers provided 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 or grounds set out in that Act.