Michael McGrath (Cork South Central, Fianna Fail)
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109. To ask the Minister for Finance the position on the savings cap of €100,000 in respect of credit unions; the number of credit unions that have been given an exemption from this requirement; his plans in respect of this matter; and if he will make a statement on the matter. [32855/16]

Michael Noonan (Limerick City, Fine Gael)
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In tandem with my commencement on 1 January 2016 of the final sections of the Credit Union and Co-operation with Overseas Regulators Act 2012 providing regulation making powers to the Central Bank, the Central Bank introduced new regulations - the Credit union Act 1997 (Regulatory Requirements) Regulations 2016 (the Regulations).

The Regulations set out,inter alia,an individual member savings limit of €100,000. The Regulations also provided that individual 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 Regulations and that individual 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 consulted with my Department on the application process and accepted the Department's observations, thereby making the application process less onerous.  Separately, the Registrar met with the representative bodies to obtain their feedback on the application process. The submission deadline for applications to retain savings in excess of €100,000 was 27 June 2016. The application form to increase savings in excess of €100,000 does not have a submission deadline and will be accepted on an ongoing basis.

I have been informed by the Central Bank that c.195 credit unions held individual members' savings in excess of €100,000 of c.€165m on 1 January 2016.  The Central Bank has indicated that c. one third of those credit unions have applied to retain individual member savings in excess of €100,000. Although the review process is nearing completion, it is currently still ongoing, thus the Central Bank cannot provide a final figure at this time. 

For those credit unions that are not approved to retain individual member savings in excess of €100,000 the transitional arrangement as set out in the Regulations apply, this means all individual member savings in excess of €100,000 held by these credit unions must be returned by 1 January 2017.

Regarding applications to increase individual members' savings in excess of €100,000, I have been informed by the Central Bank that those applications are assessed primarily by reference to the business case and related financial projections which must be submitted along with the application form. I have further been informed that to date 6 credit unions have made such an application, with 1 subsequently being withdrawn by the credit union and the remaining 5 currently under review by the Central Bank.

The Central Bank has committed to review the savings limit three years from commencement of the regulations. I intend to issue a letter to the Central Bank by the end of the year requesting an accelerated review of the savings limit.

In recognising the important role of credit unions as a volunteer co-operative movement in this country, the Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is determined to continue to support a strengthened and growing credit union movement.