John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I am responding to this issue on behalf of the Minister for Finance who wishes to thank Deputy Moynihan for raising it. This is primarily a matter for the Central Bank but the Minister is fully aware of the strength of feeling locally about the situation in Charleville credit union and the restoration of credit union services. In relation to credit unions, the role of the 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 his 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. Where issues arise within individual credit unions the Central Bank gives them time to implement remedial actions, including potential mergers. In the case of Charleville credit union the Central Bank has been engaging with it over a number of years seeking remediation of the weaknesses in its financial position. As the Deputy is aware, Charleville credit union had been exploring a number of different options in recent years and has explored merger discussions which have not been successful.

The view of the Central Bank is that the inability of the credit union to address its reserve position, despite previous receipt of external funding, has resulted in it being necessary to apply for the winding up of the credit union. As the Central Bank, acting as independent regulator, is closest to the detail of this case it would be difficult for the Minister for Finance to second guess its expert opinion.

The Central Bank of Ireland made an ex parteapplication to the High Court on 13 October 2017. The High Court approved the appointment of joint provisional liquidators, David O'Connor and Jim Hamilton of BDO, to Charleville credit union. The Central Bank took this action in order to ensure the protection of members’ funds. In presenting its assessment to the court, the Central Bank outlined that it believes all feasible options available to Charleville credit union to raise and maintain its reserves at the levels required by law have been exhausted. The joint provisional liquidators will oversee the closure and wind-down of the credit union pending a final decision of the court. The credit union will not reopen and all issues relating to the wind-down of services will be managed by the joint liquidators.

The Minister for Finance can advise the Deputy that the deposit guarantee scheme, DGS, has been invoked and that members' savings are covered by the scheme up to €100,000 per member. Compensation payments will automatically issue by cheque to all duly verified depositors. The payments will be made as early as possible within the statutory deadline of 20 working days.

The Minister for Finance can further advise that the Central Bank is conscious that there is a demand for the services of a credit union in the local area and will examine what arrangements can be put in place to provide specific credit union services in the Charleville community in the future. The Central Bank is keen that credit union services are available to the people of Charleville. In some cases members may currently be able to avail of services in another credit union in the area as the common bond may extend into their locality or through their place of work.

The Government recognises the important role of credit unions as a volunteer co-operative movement in the country and while the roles of the Minister for Finance and the Central Bank in relation to the credit union sector are distinct, they are both working to protect members' savings and maintain the financial stability and well-being of credit unions generally. The Government is absolutely determined to continue to support a strengthened and growing credit union movement into the future. I will try to ascertain from the Central Bank what specific proposals it has and a timeframe for them in relation to the establishment of new credit union facilities in Charleville.

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