Written answers

Thursday, 28 February 2013

Department of Finance

Credit Unions Issues

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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To ask the Minister for Finance if he has engaged with the credit union sector regarding the implications for fixed deposit investment products held by its members arising from the liquidation of the Irish Bank Resolution Corporation; the role of the regulator in protecting the interests of credit unions in the liquidation process; and if he will make a statement on the matter. [10617/13]

Photo of Dessie EllisDessie Ellis (Dublin North West, Sinn Fein)
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To ask the Minister for Finance the total volume of Irish Credit Union deposits or bonds in the former Irish Bank Resolution Corporation and if he will outline the impact of the liquidation of IBRC on Credit Unions. [10576/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 58 and 61 together.

I am advised by the Central Bank of Ireland that certain tracker bonds sold to credit unions which were liabilities of IBRC at the time of the liquidation have a structured deposit element which is covered by the Deposit Guarantee Scheme for that element of the product. As a result the first €100,000 of any claim from these depositors is covered under the DGS. The bond itself is not covered by the ELG scheme as it predates that scheme.

I understand that the total amount of Credit Unions' investment in the bond is of the order of €15 million and that 16 credit unions may be affected. As part of their regulatory requirements, credit unions are required to maintain realised reserves for the purpose of absorbing unexpected losses, including from unguaranteed losses. This should be the first line of defence in such circumstances. Officials from my Department have met with the Irish League of Credit Unions on this matter and the credit unions affected have been advised to deal with the Special Liquidator.

The Registrar of Credit Unions at the Central Bank of Ireland is the independent regulator for credit unions. 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. It is a matter for the Registrar to engage with the credit unions affected in that context.

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