Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Question 53: To ask the Minister for Finance his plans for the future of the credit union sector here. [14157/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

The Government's position with regard to the credit union sector set out in the Programme for National Government 2011-2016 recognises the importance of credit unions as a volunteer co-operative movement and distinguishes between them and other financial institutions. The programme for Government agreed that a Commission on Credit Unions would be established to review the future of the movement and make recommendations in relation to the most effective regulatory structure for it. In carrying out its work, the Commission will take into account their not-for-profit mandate, their volunteer ethos and community focus, while paying due regard to the need to fully protect depositors' savings and financial stability.

The Deputy will also be aware that we have certain commitments in relation to the credit union sector under the EU/IMF Programme of Support for Ireland. Under this agreement diagnostic and stress tests on credit unions have been completed by the Central Bank and in light of these I have prepared a plan to underpin the solvency and viability of undercapitalised credit unions. The Government has also agreed the Terms of Reference for the Commission on Credit Unions. Having regard to the particular nature of the credit union sector, the Commission will examine this Strategy as a priority and make recommendations to me, as Minister for Finance, regarding the implementation of the proposals contained therein. By the end of 2011, and in line with the EU/IMF Programme of Support for Ireland, we will submit legislation to the Houses of the Oireachtas to assist the credit unions with a strengthened regulatory framework including more effective governance and regulatory requirements.

I will not pre-empt the outcome of the deliberations of the Commission on Credit Unions regarding the future evolution of the sector. The Commission will make recommendations to strengthen the regulatory framework for credit unions by 30 September 2011. A final report will be submitted to me by 31 March 2012. I will shortly make an announcement regarding the establishment and membership of this Commission so that it may begin this important body of work.