Enda Kenny (Mayo, Fine Gael)
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Question 268: To ask the Minister for Finance if he will comment on the estimated amount of moneys lent by credit unions to banks and other financial institutions in 2006; and if he will make a statement on the matter. [27909/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I presume the Deputy is referring to the high proportion of credit union savings that are currently invested in banks and other financial institutions. This largely reflects the strong performance of credit unions in attracting savings. It also reflects the highly competitive environment for lending in which credit unions operate.

The Irish League of Credit Unions (ILCU) contends that the current limits in the Credit Union Act, 1997 on longer-term lending by credit unions are affecting the competitiveness of credit union lending, as credit unions are not in a position to compete with the banking sector in one of the more demand driven areas of the lending market overall. The Registrar of Credit Unions in the Financial Regulator does not favour any change in the lending limits at this time, primarily because of the scope for increased credit risk.

Given the divergence of views between credit unions and the Registrar in relation to this important issue, I referred the matter to the expert statutory advisory body on credit union matters, the Credit Union Advisory Committee (CUAC) requesting their advice as to whether a review of the current limits on longer-term lending by credit unions should be initiated. The recommendation of the Committee is expected shortly.