Dáil Éireann Debate, Tuesday - 1 December 2020
236. Deputy Carol Nolan asked the Minister for Finance if his attention has been drawn to concerns following changes to credit union lodgment limits; if he will address concerns (details supplied); and if he will make a statement on the matter. [40275/20]
Amharc ar fhreagraThe Central Bank has advised me that it cannot comment on individual credit union cases. However, the Central Bank has informed me that credit unions have experienced savings inflows over recent years, which have outpaced loan demand from their members. The savings which a credit union does not lend to its members must be invested while ensuring that such investments do not result in undue risk. At the same time, due to low/negative investment returns, reflective of the current low interest rate environment, credit unions may decide to limit the amount of savings to be invested.
Accordingly, individual credit unions may take business decisions to limit the amount of savings they accept from their members. Such limits are separate from the savings limit set out in Central Bank Regulations.
The Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (the 2016 Regulations) set an individual savings limit of €100,000 that applies on a per member basis. Individual credit unions could apply to the Central Bank to retain individual members’ savings in excess of €100,000, which were held at commencement of the 2016 Regulations. In addition, on an ongoing basis, credit unions with total assets in excess of €100 million can apply to the Central Bank for approval to increase individual member savings in excess of €100,000. The Central Bank undertook a review of the continued appropriateness of the €100,000 individual member’s savings limit during 2020 which concluded that the limit remains appropriate.
Separate to the limits set out by the Central Bank in the 2016 Regulations, individual credit unions may decide to set individual savings limits/caps, which are below the €100,000 limit contained in the 2016 Regulations, in order to take account of their own specific business requirements and strategy.
It is a commercial decision for any individual credit union to put in place any limits on the level of member savings or to decide to return some member savings where they are of the view that this will best support the ongoing prudent operation of their credit union for their members.
