Pearse Doherty (Donegal South West, Sinn Fein)
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45. To ask the Minister for Finance if and when he will commence the provisions of the remaining sections of the Credit Union and Co-operation with Overseas Regulators Act 2012; and if he will make a statement on the matter. [35245/15]

Michael Noonan (Limerick City, Fine Gael)
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The Credit Union and Co-operation with Overseas Regulators Act 2012 was signed into law by the President in December 2012.

It was agreed at that time that it would be neither practical nor feasible to commence the Act in its entirety in one fell swoop. Following that, an implementation timetable for the 2012 Act was devised in consultation with stakeholders, including credit union representative bodies.

Commencement of all sections of the 2012 Act has been aligned with the credit union financial year and the introduction of the underpinning Central Bank regulations, with a view to implementation of the 2012 Act in a coherent and cohesive manner. This has provided credit unions with the time necessary to ensure that any required processes or procedures are in place prior to implementation of each tranche.

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 at end December 2015.  It is my intention to commence the remaining sections of the 2012 Act on 31 December 2015 in line with the introduction of the regulations.  These sections of the 2012 Act, when commenced, will replace, amend or supplement existing sections of the 1997 Act.

As outlined in the Central Bank's feedback statement on CP88, as part of the consultation process I proposed that in the interests of clarity and fairness, credit unions are provided with details of the process of applying for a retention of savings above the limit amount.  I have been informed by the Registry of Credit Unions that all credit unions have been contacted giving further information on its application criteria for the retention of savings in excess of €100,000.  The Registry of Credit Unions 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 will provide an application form and explanatory notes in order to assist credit unions. It is anticipated that application forms will be available during December 2015.  It is envisaged that applications will be accepted in the first quarter of 2016 and that applicant credit unions will be informed by the end of the second quarter of 2016 on the outcome of the process, which is well within the 12 month transitional period. Where a credit union has demonstrated that it meets the criteria, it will be in a position to retain members' savings in excess of €100,000 held at the commencement of the regulations.

I welcome the steps that have been taken to provide clarity for credit unions on the criteria for the retention of savings over €100,000 and also welcome the proposed engagement with the representative bodies to seek their comments on the application process. 

The Central Bank has also informed me that it is committed to undertaking a review of the continued appropriateness of the savings limit, once the impact of the restructuring process can be assessed. It is envisaged that this review will commence within three years of the introduction of the regulations. The Central Bank has agreed to provide regular updates to my Department on developments in this matter.  

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.

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 continue to support a strengthened and growing credit union movement.