Eamon Gilmore (Dún Laoghaire, Labour) | Oireachtas source

I join with Deputy Ó Fearghaíl, on behalf of the Government, in communicating our sympathy with the people of the Philippines, who are enduring a terrible natural tragedy. I acknowledge Deputy Ó Fearghaíl's welcome for the action that the Government is taking in providing emergency funding straight away in the form of €1 million through NGOs. We are also providing some practical assistance through tents, blankets and emergency facilities of that kind. We also have a rapid response core of technical people, which is ready to assist. We will work with the UN agencies to mobilise the greatest possible international response to that tragedy.

The Deputy asked me a number of questions arising from the action that was taken in respect of the Newbridge Credit Union. That action was taken in order to protect the members and savings of the credit union and to prevent a situation arising whereby the credit union would have to be liquidated. Other options had been looked at over a period of time, including the possibility of an amalgamation of that credit union with another credit union, but that did not work out.

The Deputy has asked me a number of specific questions and I want to answer them directly. First, on the Government's position in respect of the credit union movement, the Government supports the credit union movement. Credit unions in this country have provided great support to people. They operate with a not-for-profit ethos and on the basis of solidarity. I want to tell the Deputy directly that the Government continues to support the credit union movement. We back that in practical terms by having €500 million available in two funds to support the credit union movement - a fund that provides for restructuring of approximately €250 million and another fund for resolution of another €250 million.

Specifically regarding Newbridge, as the Deputy knows there were a number of exceptional circumstances in that case. The average loan issued by credit unions throughout the country is €7,764. There were 26 loans of an average €550,000 in Newbridge. There was one loan of €3.2 million, which was in excess of the Credit Union Act's restriction of a maximum of 1.5% of the total assets. Some 53% of loans exceeded five years' duration as opposed the maximum set out in the Credit Union Act of 20%. The Government would like to highlight its support for the future return of a credit union to Newbridge. We will work with people in Newbridge to that end.

The Deputy asked specifically about the reports in the newspaper about the number of other credit unions that may have difficulties. He mentioned a figure of one in four credit unions possibly being in difficulty and reports to that effect. There are 392 credit unions in the country. Based on the data submitted by the credit unions themselves, as of 30 September 2013 some 20 credit unions have reported regulatory reserves below the minimum requirement of 10% of assets. This gives rise to a capital shortfall in the region of about €11 million in total, but this has to be put in the context of the funds that the Government has made available of about €500 million. The Central Bank - this may be where the reportage has taken off - is working through a portfolio of approximately 100 credit unions on a case-by-case basis. This relates to issues that arise in those credit unions - levels of arrears, inadequate bad debt provision, high fixed asset to total asset ratios and other supervisory concerns. However, the actual number of credit unions that have reported regulatory reserves below the minimum requirement is 20 of the 392.

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