Michael McGrath (Cork South Central, Fianna Fail)
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Question 95: To ask the Minister for Finance if he will provide details of the recapitalisation of Credit Unions to date; if he is satisfied that the recapitalisation fund will be sufficient to withstand losses that the sector is facing; the position regarding the plans for consolidation of the sector; and if he will make a statement on the matter. [36173/12]

Michael Noonan (Limerick City, Fine Gael)
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There is currently no mechanism for the State to inject capital into credit unions, outside of the context of resolution. The Irish League of Credit Unions (ILCU) operates on an all-island basis a savings protection scheme (SPS) for credit unions. The SPS is funded by the sector and operates by providing financial support to credit unions that get into difficulty. As this is a privately owned and managed fund it is not possible to provide the Deputy with the information requested.

The Commission on Credit Unions Report recommended the establishment of a statutory stabilisation mechanism whereby financial assistance could be given to credit unions on an individual basis, in certain limited circumstances, with certain conditions attached to the provision of such assistance. This would be facilitated by the establishment of a stabilisation fund to be managed by the Central Bank. The General Scheme of the Credit Union Bill 2012 which was published on 28 June 2012 sets out the legislative proposals on this statutory stabilisation mechanism.

The restructuring of the credit union sector on a voluntary, incentivised and time-bound basis formed a core recommendation of the Report of the Commission. The Report set out a timescale for the completion of the restructuring process by end 2015. The General Scheme of the Credit Union Bill 2012 also makes provision for the establishment of the Credit Union Restructuring Board (the ReBo) to oversee and facilitate the restructuring of credit unions. The ReBo will engage with credit unions over the coming months and will assist credit unions with restructuring proposals and due diligence. These proposals, which may include proposals for transfer or amalgamations of credit unions, will then be presented to the Board of the ReBo to consider. If funding is required, the first call will be on the excess capital within the merging credit unions. The affordability of sector wide contributions will also be assessed. If further funding is required, Exchequer funding may be provided on a recoupable basis.