Written answers

Thursday, 25 November 2010

Department of Finance

Financial Services Regulation

5:00 pm

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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Question 83: To ask the Minister for Finance the position regarding a matter (details supplied). [44500/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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As Minister for Finance, my role is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions. The Registrar of Credit Unions is responsible for administering the system of regulation and supervision of credit unions provided under the Credit Union Act 1997, with a view to the protection by each credit union of the funds of its members and the maintenance of the financial stability of credit unions generally. Following the Government's decision in September 2008 on the extension and increase in protection available under the Deposit Guarantee Scheme, all credit union savers can be reassured that their deposits and shares to the total maximum value of €100,000 are safe and secure.

As the Deputy will recognise, the current serious difficulties in the financial sector overall and the accompanying economic downturn is affecting all financial institutions, including credit unions. There has also been an increase in bad and doubtful debts, as is the case across the whole of the financial sector. Credit union investment portfolios are also being impacted and losses are arising on certain credit union investments. It is not surprising that this combination of trends has led to a situation where credit unions generally have reported a decline in surpluses in the last two years.

I am aware that the Registrar of Credit Unions is dealing with specific difficulties in a number of credit unions. The Registrar is continuing to work closely with the Boards of those credit unions that are encountering problems. Oversight, monitoring and controls over these credit unions by the Registrar of Credit Unions are intended to assist them in addressing current issues with a view to ensuring their financial stability.

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