Michael McGrath
Ceist:279. Deputy Michael McGrath asked the Minister for Finance his plans to remove the current constraints imposed by section 35 on credit unions. [20154/15]
Amharc ar fhreagraTuesday, 26 May 2015
Ceisteanna (279)
Freagraí scríofa
My role as Minister for Finance is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.
The Registrar of Credit Unions at the Central Bank is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.
Section 35 of the Credit Union Act, 1997 (1997 Act), contains lending limits that apply to all credit unions including a limit on the maximum outstanding liability to an individual member and limits on the percentage of the loan book that can be outstanding for periods exceeding both five and ten years.
Section 11 of the Credit Union and Co-operation with Overseas Regulators Act 2012 (2012 Act), will substitute a new section 35, which relates to lending, into the 1997 Act. On commencement of section 11 of the 2012 Act, the current large exposure and maturity limits contained in the existing section 35 of the 1997 Act will be removed and the Central Bank will be provided with regulation making powers, including powers to set large exposure and maturity limits for lending.
The Central Bank issued a consultation paper - Consultation on Regulations for Credit Union on commencement of the remaining sections of the Credit Union and Overseas Regulators Act 2012 - CP88 - on 27 November 2014. This paper includes draft lending regulations for credit unions. Under these regulations credit unions will continue to be allowed to lend up to 30% of their loan book over five years and up to 10% of their loan book over 10 years, subject to a maximum maturity of 25 years. In addition, credit unions will be able to apply to the Central Bank for an extension to their longer term lending limits - up to 40% of their loan book over 5 years and up to 15% of their loan book over 10 years. Approval will be subject to conditions set by the Central Bank. As indicated in CP88, the Central Bank is reviewing the conditions that currently apply for credit unions to be approved to extend their longer term lending limits.
The Central Bank has provided a 3 month consultation period and the closing date for submissions was 27 February 2015. Following review of all submissions received the Central Bank will publish a feedback statement outlining the feedback received, the Central Bank's response and the final regulations for credit unions. All submissions received will be made available on the Central Bank's website at this stage. The Central Bank is planning to publish the feedback statement at the end of June.