John Lahart (Dublin South West, Fianna Fail)
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145. To ask the Minister for Finance if he will consider increasing the limit on the amount of shares a member can hold in their credit union account from €100,000 to €200,000; if his attention has been drawn to the negative affect this restriction is having on credit unions; and if he will make a statement on the matter. [28526/16]

Michael Noonan (Limerick City, Fine Gael)
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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.

The Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (2016 Regulations) were introduced by the Central Bank and came into effect on 1 January 2016, following commencement of the remaining sections of the Credit Union and Co-operation with Overseas Regulators Act 2012 which provided regulation making powers to the Central Bank. The 2016 Regulations set out an individual member savings limit of €100,000. These Regulations provided that credit unions could apply to the Central Bank to retain individual members' savings in excess of €100,000, which were held at commencement of the 2016 Regulations and also that credit unions with total assets in excess of €100m could apply to the Central Bank for approval to increase individual member savings in excess of €100,000.

The Central Bank has informed me that under the current credit union business model, the need for credit unions to take in large savings from individual members has not been demonstrated to date. The average amount of savings held by individual members is circa €3,900. As at 31 Dec 2015, circa 195 credit unions held individual members' savings in excess of €100,000. The total savings held in excess of €100,000 was circa €165m. The total amount of savings in excess of €100,000 in the credit union sector was circa 1.2% of total member savings and less than 0.13% of all credit union members had savings in excess of €100,000.

The Central Bank has further informed me that as indicated in the Feedback Statement on CP88 it is committed to commencing a review of the continued appropriateness of the savings limit within three years, when the impact of the credit union sector restructuring currently underway can be assessed.

In addition and in line with this Governments commitment set out in the Programme for a Partnership Government, I will be writing to the Central Bank towards the end of this year asking the Central Bank to instigate a review of the continued appropriateness of the savings limit.

John Lahart (Dublin South West, Fianna Fail)
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146. To ask the Minister for Finance if he will consider making an amendment to the Credit Union and Co-operation with Overseas Regulators Act 2012 to will allow for the reintroduction of the role of treasurer onto the board of credit unions, with no honorarium payment allowed; and if he will make a statement on the matter. [28527/16]

Michael Noonan (Limerick City, Fine Gael)
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The Report of the Commission on Credit Unions, published in 2012, made a number of recommendations including in relation to governance requirements for credit unions.  Recommendations made were agreed by all stakeholders. These governance requirements set out the role and responsibilities of two key positions within the credit union - those of chair of the board and the manager of the credit union.  Section 64 of the Credit Union Act 1997 identifies the treasurer as the 'managing director' of the credit union and his/her responsibilities included executive responsibilities such as submitting financial statements to the board. In order to ensure that the role and responsibilities of board and management do not overlap and that board members have governance rather than executive responsibilities, the Commission recommended that the 1997 Act be amended to remove the role of treasurer and assign executive responsibilities to the management of the credit union.  This recommendation was reflected in section 21 of the Credit Union and Co-operation with Overseas Regulators Act 2012. Having regard to the foregoing, I have no plans at this time to introduce such an amendment for credit unions.

More generally, in terms of board composition and competence and capability, under the Credit Union Act, 1997 the board of directors of a credit union must be of sufficient number and expertise to adequately oversee the operations of the credit union while the nomination committee must review the composition of the board for the purpose of identifying any deficiencies.  In addition, under the Fitness and Probity Regime for credit unions, a credit union must not permit a person to perform a Controlled Function (which includes all members of the board) unless it is satisfied on reasonable grounds that the person is, amongst other things, competent and capable to perform their role.