Dáil Éireann Debate, Tuesday - 26 May 2015
280. Deputy Michael McGrath asked the Minister for Finance in the past five years, the number of credit unions that have been approved for, and declined for, additional services; the number of applications ongoing; and the length of time it takes on average from the preliminary application to full approval. [20155/15]
Amharc ar fhreagraMy 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.
I have been informed by the Central Bank that where a credit union wishes to provide services to its members, in addition to the services that are provided for under the Credit Union Act, 1997 (1997 Act), an application may be made to the Central Bank for approval to provide such additional services in accordance with the provisions set out in sections 48 to 52 of the 1997 Act.
The Central Bank has further informed me that since 2010 it has received less than 10 applications for approval of additional services under section 48 to 52 of the 1997 Act. These have all been received in the last 9 months and are currently at a various stages of the approval process.
As required under the 1997 Act a credit union must complete the approval process before it can provide an additional service. This process has a number of steps including the following:
- Obtain a Preliminary View from the Central Ban
- Approval by the credit union of the provision of the proposed additional service. Once a positive preliminary view has been received from the Central Bank, the credit union must adopt a decision to provide the proposed service to its members. The credit union can proceed with giving notice of the resolution for the proposed service to its members in accordance with the rules of the credit union. Such a resolution may be passed in any of the following ways:
- by AGM;
- by SGM; or
- by a resolution of he board of directors of the credit union
- Amendment to standard rules of a credit union
- Obtain Formal Approval from the Central Bank
The length of time from preliminary application to final approval varies and can be impacted by the quality and completeness of the information provided by the credit union.
The Central Bank has indicated in communications to the sector that it is, in principle, supportive of credit unions developing additional services. The Central Bank will consider proposals from credit unions on new additional services they wish to provide to members where the credit union can demonstrate that:
- the proposed additional service is supported by a robust business case;
- the proposed additional service is not contrary to financial services legislation;
- the board of directors has a sound appreciation of the nature of the additional service proposed and is fully informed of the strategic, governance, risk management, operational, financial and legal implications involved; and
- systems and controls are in place to ensure any risks involved in the provision of the additional service are managed and mitigated.
