Dáil Éireann Debate, Thursday - 29 September 2016
78. Deputy Michael McGrath asked the Minister for Finance if, in view of the fact that credit unions compete with banks and the State has a declared interest in ensuring that Irish banks remain viable and profitable, he will consider the establishment of an oversight body to ensure that the regulations are being implemented in a proportionate, fair and equitable manner. [27882/16]
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.
Credit unions in Ireland operate under credit union specific legislation in the Credit Union Act 1997 and the Credit Union and Co-operation with Overseas Regulators Act 2012, with recommendations of the Commission on Credit Unions forming the basis for the 2012 Act and new regulations implemented.
There are currently a number of measures in place which provide input by relevant stakeholders into new regulations and to provide oversight of the regulatory functions of the Central Bank in relation to credit unions. Before making regulations , under section 84A of the Credit Union Act 1997, the Central Bank must consult with the Minister for Finance and the Credit Union Advisory Committee and any other body the Central Bank considers has credit union expertise or knowledge or that the Central Bank considers appropriate to consult. There is also a Consultation Protocol in place between the Central Bank and credit unions which ensures that the Central Bank consults on new regulations that will, in the Central Bank's view, have a significant impact on the business of credit unions. Also, under section 32M of the Central Bank Act 1942 the Central Bank is required, at least every 4 years, to make arrangement for a peer review of the performance of its regulatory functions in relation to credit unions. The International Credit Union Regulators' Network carried out such a review of the Central Bank in 2015.
In June 2016 CUAC produced a significant report, reviewing the Implementation of the Recommendations of the Commission on Credit Unions fulfiling one of the key credit union objectives as outlined in the Programme for Partnership Government. The Report provides an in-depth analysis of the sector from a financial perspective and includes various stakeholder views, thus ensuring a balanced report. It provides focused and effective recommendations under seven specific headings; tiered regulation, section 35, consultation and engagement with the Central Bank, governance, restructuring, business model development and additional matters. On establishment of an Implementation Gro up consisting of credit union stakeholders, each of those recommendations will be considered in depth prior to implementation in a cohesive manner.
The Government recognises the important role of credit unions as a volunteer co-operative movement in this country. The Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is determined to support a strengthened and growing credit union movement.
