Michael McGrath (Cork South Central, Fianna Fail)
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83. To ask the Minister for Finance the initiatives that have been undertaken by the Central Bank of Ireland in recent times that will ensure development and growth of the credit union sector in view of the Registrar of Credit Unions remit to maintain the financial stability and well-being of credit unions; and if he will make a statement on the matter. [2354/17]

Michael Noonan (Limerick City, Fine Gael)
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The Registrar of Credit Unions at the Central Bank recognises the strategic challenges facing the sector, the need to revitalise business models and to find ways of doing business to better serve members, delivering on their expectations.

The Registrar of Credit Unions is currently engaging with both credit unions and the Representative Bodies on their business model development proposals. A dedicated unit within the Registry of Credit Unions, headed by a Deputy Registrar, has been established specifically to focus on the area of business model development and as part of the stakeholder engagement process, the Central Bank established Sector Stakeholder Dialogues. These dialogues commenced in November 2015 with a view to gaining a better understanding of how credit unions want to develop their business model and to identify any changes that may be required to the regulatory framework to facilitate prudent development. Since the establishment of the Sector Stakeholder Dialogues seven meetings have taken place. To date the focus has been on a number of areas including:

- Longer term lending;

- Additional services framework; and

- Publication of sectoral data.

The Central Bank has recently approved a suite of additional services known as a Member Personal Current Account Service (MPCAS) for 6 applicant credit unions under the Additional Services Framework set out in sections 48-52 of the Credit Union Act, 1997. This represents an example of an additional service that has been approved by the Central Bank and it is open to credit unions to apply for similar approval for this service (this does not preclude a credit union from making an application for approval of any other additional service in accordance with sections 48-52 of the 1997 Act). This MPCAS provides for credit unions to offer debit cards, overdrafts and a full range of payment services within an appropriate risk framework. The Central Bank has published details of MPCAS and the approval process, along with details of the application requirements and related guidance on its website.

The Registry of Credit Unions is also engaged on a number of other proposals, both from individual entities and at a sectoral level, including Mortgage Lending and Social Housing proposals from the representative bodies.  Funding greater longer term lending with short term funding (deposits) is a potential issue for credit unions with associated liquidity and asset liability management considerations.

In addition, the Credit Union Advisory Committee (CUAC) made a number of recommendations in its recent substantial report presented to me on 29 June 2016.  An Implementation Group, comprising representatives from a number of credit union stakeholder groups, a CUAC member, a Central Bank Official and headed up by a Department of Finance Official, will meet in the coming weeks to begin overseeing and monitoring implementation of those recommendations.  It is expected that implementation of CUAC's recommendations will also assist credit unions in the area of business model development.