Michael McGrath (Cork South Central, Fianna Fail)
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274. To ask the Minister for Finance if he will provide a breakdown of the amount and purpose of public funding that has been required to date by the credit union sector; and if he will make a statement on the matter. [20149/15]

Michael Noonan (Limerick City, Fine Gael)
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The Government has made available €250 million to the Credit Union Fund for the voluntary restructuring of credit unions being facilitated by the Credit Union Restructuring Board (ReBo)  on a voluntary, incentivised and time-bound basis. The Government has also provided €250 million to the Credit Institutions Resolution Fund for resolution purposes.

Credit Union Fund

The Credit Union Fund was established under Section 57 of Credit Union and Co-operation with Overseas Regulators Act 2012 (the 2012 Act) and the Minister for Finance contributed €250m to this Fund.  The purpose of the Fund includes provision of financial support for restructuring of credit unions and to meet the expenses of ReBo in discharging its functions under the 2012 Act. 

To date, ReBo has drawn down €5,875,000 from the Credit Union Fund. This amount consists of €2,950,000 towards providing financial assistance to credit unions undergoing restructuring and €2,925,000 towards operating costs of ReBo. Approximately 50% of ReBo's operating costs is recoverable  in the form of a ReBo levy on the credit union sector. This Levy came into effect in December 2014 with just under €1.4 million collected to date.  

Credit Institutions Resolution Fund

The Credit Institutions Resolution Fund - Resolution Fund, was established by section 10(1) of the Central Bank and Credit Institutions (Resolution) Act 2011 (as amended) - 2011 Act. Under section 10(2) of the 2011 Act, the Resolution Fund is to provide a source of funding for the resolution of financial instability in, or an imminent serious threat to the financial stability of, an authorised credit institution. This definition includes a credit union.

To date, the resources of the Resolution Fund have been utilised to fund the resolution of four credit unions. In the case of three of those credit unions, the resolution action taken was a directed transfer under the 2011 Act, and the Resolution Fund funded a financial incentive for the transferee. The remaining case was a liquidation, and no financial incentive was paid from the Resolution Fund in respect of that action. In each of the four cases, the Central Bank discharged its third party resolution-related costs against the Resolution Fund.

The amounts paid or payable to date from the Resolution Fund for incentives in each of the three transfer resolution cases are as follows:

Newbridge Credit Union Limited: €27 million

Howth Sutton Credit Union Limited: €2.15 million

Killorglin Credit Union Limited: €2.15 million

Central Bank resolution-related expenses that have been discharged against the Resolution Fund to date amount to €2.7 million.

Credit unions are contributing to the Resolution Fund in the form of a Levy.

The Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is absolutely determined to support a strengthened and growing credit union movement.