Trevor Sargent (Dublin North, Green Party)
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Question 295: To ask the Minister for Finance if there has been progress or an outcome to the regulatory inspection which he promised; and the Government's plans to upgrade and update those aspects of credit union legislation and regulation which are curtailing and hampering the proper development of the credit union movement. [35419/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Regulatory inspections are the responsibility of the Registrar of Credit Unions. The Registrar of Credit Unions is statutorily independent of me in performing his regulatory functions. On foot of the outcome of any regulatory investigations the Registrar can take whatever steps he considers necessary to resolve any issues using the powers available to him.

In relation to credit union legislation, 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 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 to safeguard members' savings during a period of rapid growth.

As Minister for 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 maximum amount a member of a credit union can hold in shares and deposits. Furthermore, the Registrar of Credit Unions recently issued guidelines on a revised 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 current 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 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. The Chair of the Regulatory Authority has recently confirmed that the Registrar of Credit Unions will engage with the credit union movement, in the first instance, to find common ground in relation to the principles that might guide the reform of the regulatory framework for credit unions.