Tom Hayes (Tipperary South, Fine Gael)
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Question 106: To ask the Tánaiste and Minister for Finance the progress made in developing a transparent and strong deposit protection scheme for credit unions; and if he will make a statement on the matter. [23593/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Irish League of Credit Unions (ILCU) has since 1989, operated a savings protection scheme (SPS) for credit unions. The SPS aims to protect the individual savings of members by ensuring that credit unions are financially and administratively sound and provides for savings protection for each individual credit union member. It is important to note that no member of a credit union has experienced any loss of shares and deposits and no credit union has become insolvent. The SPS has only been called upon in a very limited number of cases, and it has never been necessary to make savings protection payments to individual credit union members.

The design and operation of the SPS for credit unions is consistent with the specific regulatory approach adopted for credit unions under the Credit Union Act, 1997. However in line with changes in the regulatory environment for financial services generally, the need for modernisation of the organisational structure and governance arrangements for the credit union SPS has become evident over time.

Earlier this year the Registrar of Credit Unions commenced a structured series of meetings with the ILCU to examine certain SPS reform proposals put forward by them. The Registrar of Credit Unions has advised that these discussions identified common ground with regard to how savings protection based on ILCU's proposal should work. I understand that, since the conclusion of these discussions, ILCU have been consulting with their membership and I am advised that they will revert to the Registrar shortly with their revised proposals for the reform of SPS.