Brian Lenihan Jnr (Dublin West, Fianna Fail)

Under the legislative framework set out in the legislation, the primary function of credit unions is to offer savings and loans services to their members. Due to significant growth in the credit union movement in recent years there has been a significant amount of resources for investment by credit unions to generate a return for members. Strict legislative control exists under section 43 of the 1997 Act which restricts investments to those trustees are authorised to invest in under the trustee authorised investment legislation.

The registrar has powers to give a regulatory direction to a credit union if he deems it appropriate in the interests of its members to limit investments of a specified class or description. Of course, it is the responsibility of the board of directors of each credit union to ensure that the investment policy is prudent and responsible and conforms to what is permissible under the Credit Union Act. To assist the boards, in October 2006 the registrar issued a detailed guidance note on investments to help safeguard the risk profile of credit union investments and to ensure that members' savings continue to be protected. This is the basis for the monitoring of the investment activities of credit unions by the registrar.

Following the changes in financial market conditions for investments since August 2007, the registrar has initiated a process, including consultation with stakeholders, with a view to revising the existing investment framework.

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