Gerry Adams (Louth, Sinn Fein)
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Question 28: To ask the Minister for Finance if he will provide an update on the application of lending restrictions on Credit Unions by the Financial Regulator; and if he will make a statement on the matter. [32747/12]

Michael Noonan (Limerick City, Fine Gael)
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The imposition of lending restrictions is the responsibility of the Registrar of Credit Unions, who is the independent regulator for credit unions. Within his independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members. 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 advises me that in order to protect the savings of members in credit unions and ensure that credit unions focus on such risks when making lending decisions, lending restrictions have been placed on a number of credit unions. The number of lending restrictions has increased as the number of credit unions experiencing a deterioration in their financial position has increased. The individual credit union lending restrictions currently in place are reviewed on a regular basis to determine whether they are still set at appropriate levels.

The Registrar has advised that currently about 57% of all credit unions are subject to lending restrictions. Almost all credit unions with a lending restriction in place have a maximum individual loan size restriction. Of the credit unions with lending restrictions, over 67% can lend €20,000 or more to an individual member.

Less than 4% of credit unions are restricted to issuing loans of less than €10,000 to an individual member, and less than 1% of credit unions are restricted to issuing loans of less than €5,000 per member. Commercial lending restrictions apply to approximately 40% of credit unions.