Martin Ferris (Kerry North, Sinn Fein)
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Question 114: To ask the Minister for Finance if he intends to introduce legislation amending the Credit Union Act 1997 in view of the concerns raised by the Irish League of Credit Unions and others regarding the deficiencies in the present legislation. [33232/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Credit Union Act, 1997 provides the legal framework for the regulation of credit unions. The Act was designed to provide the credit union movement with a regulatory structure that reflects and promotes the particular ethos and philosophy of the credit union movement, its strong tradition of volunteer service and the core objective of providing opportunities for saving and lending for members of credit unions.

The approach to regulation embodied in the Credit Union, 1997 Act has served the credit union movement well by providing clarity and certainty to individual credit unions, their Directors and members. It has helped support the continued stability of the credit union movement and safeguard the members' savings during a period of rapid growth.

As Minister of Finance, my role is to ensure that the legal framework for credit unions continues to be appropriate for the effective operation and supervision of credit unions. In recent months, I have introduced a regulation to increase the amount of money that credit unions can take in on deposit. Furthermore, I understand that following a period of extensive consultations, the Registrar of Credit Unions will shortly be issuing guidelines on a new investment framework for prudent and responsible investment by credit unions.

Other developments include the establishment of a review group chaired by my Department to examine the limits on longer-term lending in Section 35 of the Credit Union Act, and the agreement by the Financial Regulator to examine proposals for reform of the Savings Protection Scheme with a view to approving the scheme under Section 46 of the Credit Union Act 1997 to strengthen the protection afforded to credit union savings.

I understand that both the credit union movement and the Registrar of Credit Unions share the view that reform of the Credit Union Act is required. I believe it would be helpful if there was a clearer, and if possible shared, understanding on how a new regulatory framework would operate before moving to develop specific proposals. Accordingly, I have recently written to the Chair of the Regulatory Authority to request that the Registrar of Credit Unions engage with the credit union movement in the first instance to find common ground in relation to the principles that might guide reform of the regulatory framework.