Terence Flanagan (Dublin North East, Independent)
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84. To ask the Minister for Finance his views on allowing established lenders such as credit unions apply risk-based pricing to their loans and charge a higher rate for higher and invariably smaller risks; and if he will make a statement on the matter. [39750/14]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware the Relationship Frameworks we have in place for the banks provide that the State will not intervene in the day-to-day operations of the State supported banks or their management decisions. Neither the Central Bank nor the Department of Finance has a statutory function in relation to interest rate decisions made by individual lending institutions at any particular time.

Credit unions must comply with the requirements on interest on loans as set out under Section 38 of the Credit Union Act, 1997.  This section provides that the interest charged on a loan to a credit union member shall not at any time exceed one per cent per month on the amount of the loan outstanding, and that the rate of interest charged on any class of loans granted at a particular time shall be the same for all loans of the class.

The Registrar of Credit Unions at the Central Bank has informed me that it is a matter for individual credit unions to determine the interest rates they deem appropriate to the classes of loans provided, taking account of the specific legislative requirements.