Michael McGrath (Cork South Central, Fianna Fail)
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85. 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. [6539/15]

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.

I have been informed by the Central Bank that it has been necessary to put lending restrictions in place in credit unions where there are regulatory concerns and resultant risk to members' savings.

The Registrar of Credit Unions informs me that currently about 56% of all credit unions are subject to lending restrictions. Lending restrictions are, in most cases, intended to be short-term in nature and kept in place until the credit union has addressed the issues giving rise to the particular concerns. 

There are two main types of lending restrictions:

1. Monthly lending restrictions. At this time less that 10% of all credit unions have this restriction in place which limits the total amount of lending within one month. Therefore, over 90% of credit unions (i.e. over 350 credit unions) have no monthly lending restrictions.

2. Maximum loan size. The average loan size in the credit union sector is just above €6,000. Currently 10 individual credit unions have lending restrictions that limit the amount per loan to less than €10,000. Although there are individual credit unions with lending restrictions above €10,000 per loan, that the vast majority  of credit unions (over 95%)  can continue to make individual loans significantly greater than the average loan size for the sector. 

These restrictions are reviewed on a regular basis to determine whether or not they are still set at appropriate levels. Reviews of individual lending restrictions are included within the planned 2015 supervisory work programme of the Registry of Credit Unions. Where a credit union can evidence improvements in its credit management practices, and systems and controls which support prudent lending, the Registrar is open to removal of restrictions. I have introduced legislative change whereby, as of 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.