Credit Union Regulation

Dáil Éireann Debate, Wednesday - 7 October 2015

Wednesday, 7 October 2015

Ceisteanna (61)

Maureen O'Sullivan

Ceist:

61. Deputy Maureen O'Sullivan asked the Minister for Finance further to Parliamentary Question No. 236 of 29 September 2015, if he will confirm that the non-implementation of section 44, the local investment provision, of the 1997 Credit Union Act is not primarily due to any reluctance or unwillingness on the part of the boards of credit unions to establish special funds for social, cultural or charitable purposes, but rather, is due to the active discouragement of such initiatives on the part of the Central Bank of Ireland in its role as Credit Union Regulator; and if he will make a statement on the matter. [34795/15]

Freagraí scríofa

Minister for Finance

Further to Parliamentary Question No. 236 of 29 September 2015, I have been informed by the Central Bank that section 44 of the Credit Union Act, 1997 provides that a credit union may establish a special fund to be used by the credit union for such social, cultural or charitable purposes (including community development) where it is approved by a resolution passed by a majority of its members present and voting at a general meeting. Funds established under section 44 do not require approval of the Central Bank. The Central Bank informs me that it is supportive of such initiatives by credit unions provided they fall within the provisions of section 44. These provisions include a requirement that funds paid into such a special fund can only be paid out of the annual operating surplus of a credit union and that no funds may be paid into such a special fund unless adequate provision has been made out of the annual surplus to cover all current and contingent liabilities and to maintain proper reserves. There is also a requirement that the payment of the funds into the special fund will not affect the financial stability of the credit union. In addition section 44(3) specifies that the amount of funds which may be paid out of the annual operating surplus into such special fund shall not exceed 0.5% of the value of the credit union's assets.