Michael McGrath (Cork South Central, Fianna Fail)
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142. To ask the Minister for Finance the number of credit unions currently subject to lending restrictions; the average length of time for which these have applied; and if he will make a statement on the matter. [32493/14]

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.

Acting as the independent regulator, the Registrar of Credit Unions at the Central Bank has applied lending restrictions to some credit unions. In its recently published 'Credit Union PRISM Risk Assessments: Supervisory Commentary', the Central Bank has highlighted that the majority of credit unions visited have been required to implement actions to remediate risk and substantially improve their lending and credit risk management standards and practices.  Where required, risk mitigation has included the Central Bank imposing lending restrictions until fundamental weaknesses are addressed. These lending restrictions have been put in place in credit unions where there are regulatory concerns about the operation of these individual credit unions and the potential risk to members' savings.

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.

The Central Bank advises that it sees restrictions, in most cases, as short term in nature, to be lifted when risks have been addressed satisfactorily and necessary corrective measures embedded. The Registrar of Credit Unions informs me that lending restrictions are reviewed on a regular basis. I have introduced legislative changes so that lending restrictions are now subject to an independent appeals process.

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.