Micheál Martin (Cork South Central, Fianna Fail)
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105. To ask the Minister for Finance if he will report on the commitments made in the confidence and supply arrangement to develop a strategy for the growth and development of the credit union sector; and if he will make a statement on the matter. [31257/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Credit unions have a key role to play in providing access to credit and other important services in local communities throughout the country. The sector has undergone fundamental change since 2011, managing many complex and challenging issues. For example, following the establishment of the Credit Union Restructuring Board (ReBo), there have been 82 mergers involving 156 credit unions resulting in an overall reduction of credit unions from 406 at September 2011 to 277 now. Over the same period loan arrears have fallen from 18% to 9% and the number of credit unions with reserves less than 10% has fallen from 51 in September 2011 to 5 at September 2016. Average reserves now stand at 17%. Lending growth has recently returned with a 6% increase to €4.2 billion in the year to March 2017 which followed a large decrease from peak in 2008.

In December 2015 the Credit Union Advisory Committee (CUAC) was invited to carry out a review of the Implementation of the Recommendations set out in the Report of the Commission on Credit Unions. The final report was published on 6 July 2016. This was a significant report providing an in-depth analysis of the sector from a financial perspective and having met with a range of stakeholders also ensured a balanced report providing focused and effective recommendations.

The recommendations are provided under seven specific headings; tiered regulation, section 35, consultation and engagement with the Central Bank, governance, restructuring, business model development and additional matters.

An Implementation Group was established to oversee and monitor implementation of these recommendations, which will support Credit Unions in developing their business model. The Group consists of members from the four main credit union representative bodies: ILCU; CUDA; CUMA; and NSF as well as a CUAC member, a representative from the Central Bank and is chaired by the Department of Finance. It has met on five occasions since February 2017 and is focused on implementing all recommendations at the appropriate time.

CUAC's Report also fulfils one of the key credit union objectives as outlined in the Programme for Partnership Government which states that the Credit Union Advisory Committee (CUAC) conduct a review on the implementation of the recommendations outlined in the Report of the Commission on Credit Unions.

In addition my officials regularly engage with all key credit unions stakeholders in relation to credit union policy matters which are not part of the remit of the Implementation Group.

The Government recognises 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.