Fergus O'Dowd (Louth, Fine Gael)
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340. To ask the Minister for Finance his views on matters raised in correspondence (details supplied) in relation to credit unions; and if he will make a statement on the matter. [31359/15]

Finian McGrath (Dublin North Central, Independent)
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391. To ask the Minister for Finance his views on correspondence (details supplied) regarding regulations to be introduced for credit unions; and if he will make a statement on the matter. [32281/15]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 340 and 391 together.

My role as Minister for Finance is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.

The Registrar of Credit Unions at the Central Bank 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.

While it is important to distinguish this division of roles, it is equally important to recognise that both the Registrar of Credit Unions and myself, as Minister for Finance are working together for the safety of members' savings and the security of the credit union sector.

I have been informed by the Central Bank that the draft regulations set out in Consultation Paper 88 (CP88), will be introduced on commencement of the remaining sections of the 2012 Act at end December 2015. The regulations will replace and, where appropriate, amend a number of requirements that currently exist in legislation and guidance. Additional requirements have also been included in the regulations, where necessary, to strengthen the regulatory framework.

The regulations introduce a maximum individual member's savings limit of €100,000 which will ensure the protection of members' savings and continue to ensure that credit unions' funding is sufficiently diversified and is not dependent on a small number of members. In order to take account of the nature, scale and complexity of a credit union, the Central Bank, following consultation, is developing its application criteria to allow credit unions apply to the Central Bank to retain savings in excess of €100,000.

The Registry of Credit Unions has informed me that it intends to engage with the representative bodies and to invite comments from them prior to finalisation of the application process. When the application process is finalised, the Registry of Credit Unions will provide an application form and explanatory notes in order to assist credit unions. The Registry of Credit Unions has also informed me that a communication on this matter will issue from the Registrar of Credit Unions in the coming days.

The Central Bank has further informed me that it is open to working with the credit union sector to ensure that prudent and appropriate business development can be facilitated within the regulatory framework. As set out in the feedback statement on CP88, the Central Bank intends to invite interested parties to discuss business model development in the coming months.

While to date the Central Bank has not received any specific proposals regarding investment projects of a public nature, the Central Bank is willing to consider such proposals including the type of regulations that would be required to facilitate such proposals.

The Registrar of Credit Unions has informed me that the Central Bank is currently carrying out a lending restriction review programme and has invited credit unions with lending restrictions to apply to have those restrictions reduced or lifted. The closing date for credit unions to apply is 30 September 2015. While applications are still being processed, of credit unions that have applied to date, 45% of those credit unions have had their lending restrictions lifted. In relation to longer term lending limits, credit unions will be able to apply to the Central Bank for an extension of these limits. Approval will be subject to conditions set by the Central Bank.

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.