Michael McGrath (Cork South Central, Fianna Fail)
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22. To ask the Minister for Finance if he is satisfied with the pace of restructuring in the credit union sector; his views that the lending restrictions are having a detrimental impact on the ability of credit unions to lend to their members; and if he will make a statement on the matter. [4672/15]

Michael Noonan (Limerick City, Fine Gael)
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The Credit Union Restructuring Board (ReBo) is actively involved with 147 credit unions in 68 different projects. Of these, 8 credit union mergers involving 20 credit unions have been completed to date; 4 proposals involving 12 credit unions are at approval stage and are due to complete shortly; 30 proposals, involving 69 credit unions are at an advanced stage of development and the remainder are at a more initial stage of development. ReBo expects that a significant percentage of these will be involved in successful completed mergers by the end of its remit.

In line with the Commission on Credit Unions recommendation, restructuring is being carried out on a voluntary, incentivised and timebound basis. I am satisfied that ReBo continues to work to the timetable set out in the Commission on Credit Unions Report and is expected to complete its work by the end of December 2015.

Credit unions have an important role to play in providing credit in local communities around the country and I am supportive of safe and responsible lending by credit unions.  

Acting as the independent regulator, the Registrar of Credit Unions at the Central Bank has applied lending restrictions to some credit unions.  I have been informed that these restrictions are viewed as short term in the majority of cases and are imposed as a means of allowing a credit union to address identified concerns as quickly as possible. These restrictions are reviewed on a regular basis.

With regard to the impact of lending restrictions on the ability of credit unions to lend, I have been  further informed by the Registrar of Credit Unions that data available to the Central Bank shows that there is no material difference between the average loan-to-asset ratio of credit unions with and without restrictions. Also, where individual lending restrictions are imposed, this data also shows that the majority of credit unions are not lending up to the lending restriction amount, with the majority of loans granted being at lower loan levels.

Reviews of individual lending restrictions are included within the planned 2015 supervisory work programme of the Registry of Credit Unions. Where credit unions can evidence improvements in their credit management practices, and systems and controls which support prudent lending, the Registrar is open to removal of restrictions. 

I am satisfied that the safety of members savings and the security of the credit union sector as a whole are central to any actions taken by the Registrar of Credit Unions.