Written answers
Thursday, 3 October 2013
Department of Finance
Credit Unions Issues
Luke Flanagan (Roscommon-South Leitrim, Independent)
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71. To ask the Minister for Finance when the Credit Union owned CUSOP will receive its authorisation from the Central Bank; if the Government is fully supportive of this initiative; and if he will make a statement on the matter. [41554/13]
Michael Noonan (Limerick City, Fine Gael)
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A Credit Union Service Organisation for Payments (CUSOP) requires a Payments Institution licence to operate electronic payment accounts for credit unions. Authorisation for the provision of such a service is a matter for the Central Bank. I have been informed by the Central Bank that they cannot provide details related to any application for authorisation due to the confidentiality provisions set out in Section 33AK of the Central Bank Act 1942 (as amended).
Luke Flanagan (Roscommon-South Leitrim, Independent)
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72. To ask the Minister for Finance if he will instruct AIB, a State owned bank, to assist the credit union movement with access to the clearing system to enable credit unions to offer full account services to their members; and if he will make a statement on the matter. [41555/13]
Michael Noonan (Limerick City, Fine Gael)
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AIB does not currently offer this service but, as the Deputy will be aware the Relationship Framework with the bank provides that the State will not intervene in the day-to-day operations of the bank or their management decisions. These frameworks are published on the Department of Finance website. I must ensure that the bank is run on a commercial, cost effective and independent basis to ensure the value of the bank as an asset to the State, as per the Memorandum on Economic and Financial Policies agreed with the EU Commission, the ECB and the IMF. The Commission on Credit Unions in its final report states that while around 10% of credit unions have their own National Sort Code, a higher percentage currently facilitate incoming and outgoing payments, including social welfare payments and card based withdrawals, through a variety of arrangements. BNP Paribas and Bank of Ireland currently offer payment clearing arrangements to credit unions.
Luke Flanagan (Roscommon-South Leitrim, Independent)
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73. To ask the Minister for Finance the details of the strategy to underpin the solvency and viability of the credit union sector that was presented to the European Commission, the ECB and the IMF; the further discussions with the staff of the European Commission, the ECB and the IMF that will be necessary to clarify some aspects of the restructuring of the credit unions; and if he will make a statement on the matter. [41586/13]
Michael Noonan (Limerick City, Fine Gael)
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The details of the strategy to underpin the solvency and viability of the credit union sector are set out in the agreed EU-IMF Programme. As part of this Programme the Government committed to a number of measures to underpin the solvency and viability of the credit union sector. These include the following:
- Establishment of the Commission on Credit Unions and publication of the Commission Report. The Commission reviewed the future of credit unions and made recommendations regarding the most effective regulatory structure for credit unions, taking into account their not-for-profit mandate, their volunteer ethos and community focus, while paying due regard to the need to fully protect members’ savings and financial stability;
- Publication of the Credit Union Bill 2012. Over sixty of the recommendations in the Commission Report were included in the Bill;
- Publication of the Credit Union and Co-operation with Overseas Regulators Act 2012. The Act implements the statutory changes recommended in the Commission’s final Report and is set out in four main parts: Prudential requirements; Governance; Stabilisation; and Restructuring;
- Introduction of a Fitness and Probity regime for credit unions;
- Introduction of payments to the Deposit Guarantee Scheme by credit unions;
- Establishment of Credit Union Fund and transfer of €250m to the Fund.
As part of each Troika mission, the European Commission, the ECB and the IMF are updated on progress achieved in the credit union sector. Progress to date includes the strengthened regulatory framework as set out in the Credit Union and Co-operation with Overseas Regulators Act 2012, the publication by the Central Bank of the Credit Union Handbook, the development of a tiered regulatory approach, the introduction of a Fitness and Probity regime for credit unions and the work of the Credit Union Restructuring Board (ReBo). In addition, we have achieved all the benchmarks set out in the EU-IMF Programme in relation to credit unions including:
EU-IMP Programme Summary
Objective | Achieved |
---|---|
Commission on Credit Unions Final Report by end-March 2012 | Done |
Credit Union Bill published by end-September 2012 | Done |
Commencement of Fitness and Probity regime | Done |
Commencement of Deposit Guarantee Scheme | Done |
Credit Union and Co-operation with Overseas Regulators Act 2012 | Done |
€250m transferred into Credit Union Fund | Done |
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