Michael McGrath (Cork South Central, Fianna Fail)
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Question 84: To ask the Minister for Finance the rules on the amount of their available cash credit unions can lodge in any one financial institution; and if he plans to review this matter in view of the reduced number of financial institutions now here. [22054/11]

Michael Noonan (Limerick City, Fine Gael)
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This is a regulatory matter. The Registrar of Credit Unions at the Central Bank of Ireland is responsible for the regulation of credit unions and is independent in the exercise of his duties. I, as Minister for Finance, have no function in decisions in this regard. I have consulted with the Registrar who advises as follows: From time to time, the Registrar of Credit Unions issues guidance to ensure compliance by credit unions with their legal and regulatory obligations. The "Guidance Note on Investments by Credit Unions" issued in October 2006 stated that investments by credit unions in a single institution should not exceed 25 percent of the total value of a credit union's investment portfolio. This guidance note was developed after extensive consultation with stakeholders in the sector including the credit union representative bodies. Further circular letters of clarification were issued to credit unions as required from time to time. Guidance notes issued by the Registrar of Credit Unions are available at http://www.centralbank.ie/regulation/industry-sectors/credit-unions/Pages/guidance.aspx

The Registrar wrote to credit unions on the 20 June 2011 informing them that, as the structural changes now taking place in the Irish banking sector may result in credit unions exceeding the limit set out in the Guidance Note as institutions merge or as deposits are transferred under the Credit Institutions (Stabilisation) Act 2010, credit unions will be allowed a period of 24 months in which to bring their investment portfolio back into compliance with the single institution exposure limit contained in the Guidance Note. The Registrar also noted that this is a transitional arrangement to facilitate credit unions managing the diversification of their investment portfolios over a reasonable period of time in a planned manner and that while it is in place current exposure levels above the 25 percent limit may not be increased.