Published on 

Minister for Finance sets date for Credit Unions to maintain deposit at Central Bank of Ireland in relation to the Deposit Guarantee Scheme

The Minister for Finance, Mr. Michael Noonan, TD, has signed an Order commencing Section 4 of the Financial Services (Deposit Guarantee Scheme) Act 2009 for credit unions, appointing a commencement date of 30th November 2012. From that date, each credit union will be required to maintain in the Deposit Protection Account at the Central Bank of Ireland, an amount equal to 0.2% of the deposits and shares held on behalf of members.

Protection available to credit union members under the Deposit Guarantee Scheme remains unchanged up to €100,000 per depositor per financial institution.

The Minister believes that this is the appropriate time to commence the requirement for credit unions to maintain the relevant deposit at the Central Bank. This measure is recommended in the Report of the Commission on Credit Unions and fulfils a commitment under the EU/IMF Programme of Support.

Ends

21 September, 2012

Notes to Editors

Deposit Guarantee Scheme

Savings in credit unions are protected up to €100,000 per member per credit union by virtue of the Financial Services (Deposit Guarantee Scheme) Act 2009 and the European Communities (Deposit Guarantee Schemes) Regulations, 1995, as amended. The Report of the Commission on Credit Unions recommends that credit unions remain subject to the general Deposit Guarantee Scheme.

In return for protection under the Deposit Guarantee Scheme, credit institutions must maintain a Deposit Protection Account at the Central Bank of such amount as may be determined by the Minister for Finance. The Report of the Commission on Credit Unions recommended that this provision be commenced for credit unions.

Under the Financial Services (Deposit Guarantee Scheme) Act 2009, the Minister for Finance has discretion as to the rate specified for a particular class of financial institution. This rate is currently set at 0.2% of deposits in EU Member States.

Operation of the DGS

The Deposit Guarantee Scheme in Ireland is administered by the Central Bank of Ireland, including maintenance of the Deposit Protection Account. The Central Bank of Ireland will contact all credit unions to inform them of the requirements, and of the procedures they will need to follow.

Report of the Commission on Credit Unions – March 2012

http://www.finance.gov.ie/viewdoc.asp?DocID=7210