Written answers

Tuesday, 15 June 2010

Department of Finance

Proposed Legislation

8:00 am

Photo of James ReillyJames Reilly (Dublin North, Fine Gael)
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Question 122: To ask the Minister for Finance if he will defer the proposed Section 35 amendment to the Credit Union Act 1997 until the outcome of the Strategic Review of the Credit Union Sector is clear; and if he will make a statement on the matter. [25075/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The credit union sector has been seeking relaxation of the Section 35 lending limits in an effort to facilitate borrowers who have run into difficulties in repaying their loans and need to have them rescheduled to allow for repayment over a longer period of time. The lending limits are set in primary legislation and an amendment to Section 35 is, therefore, required to be made at this point. Accompanying measures are also required to balance the increased flexibility in relation to rescheduling and the Registrar of Credit Union does not have the power to impose these additional conditions that are required to be introduced across the sector.

The restrictions contained in Section 35 of the Credit Union Act 1997 are an important asset and liability instrument which has protected the financial stability of the credit union movement over many years and it would not be prudent to await the outcome of the strategic review. While the review itself is planned to be completed by March 2011, any primary legislation arising would require some considerable further time to implement. The credit union sector needs to be safeguarded further now to ensure that it can continue to provide assistance to its members in the current difficult economic climate while at the same time lending only within its capacity to do so.

I have decided therefore to proceed with the amendments to Section 35 now.

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