Michael McGrath (Cork South Central, Fianna Fail)
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168. To ask the Minister for Finance the number of credit unions that currently have lending restrictions imposed on them by the regulator; if he will provide a profile of the nature of the lending restrictions; the lowest maximum permitted amount for an individual credit union; and if he will make a statement on the matter. [30845/14]

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 her 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 it has been necessary to put lending restrictions in place in credit unions where there are regulatory concerns about the operation of these individual credit unions and the resultant risk to members' savings. The number of lending restrictions is a reflection of concerns about lending practices in the sector.

Currently about 59% 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, approximately 70% currently can lend €20,000 or more to an individual member, which is a sizeable monetary amount and should cover most individual  circumstances.

Of the credit unions with maximum individual loan size restrictions, 60% can lend from €20,000 to just under €30,000, 4% can lend from €30,000 to just under €45,000, 5% can lend from €45,000 to just under €75,000 and less than 2% can lend from €75,000 up to €100,000.

2.1% of all credit unions are restricted to issuing loans of less than €10,000 to an individual member. Fewer than 1% of all credit unions are currently restricted to issuing loans of less than €5,000 per member, unchanged since 2012. These are the cases where there are more significant concerns in terms of risk to members' savings.

I have been informed that individual credit union lending restrictions currently in place are reviewed on a regular basis to determine whether they are still set at appropriate levels. Lending restrictions are typically given effect by regulatory directions. As from 1 August 2013 regulatory directions are appealable to the Irish Financial Services Appeals Tribunal.

I have, on a number of occasions, highlighted the Governments' recognition of the important role of credit unions as a volunteer co-operative movement in this country and also the importance of getting lending going in the economy. However, the issue of lending needs to be constructively considered in order to ensure a viable credit union sector into the future.