merrion street

The Minister for Finance, Mr Michael Noonan T.D. today announced the commencement of a public consultation process in advance of the introduction of a levy on credit unions to fund the provision of stabilisation support.

The introduction of stabilisation support for credit unions was recommended in the agreed report of the Commission on Credit Unions and has been provided for in the Credit Union and Co-Operation with Overseas Regulators Act 2012.

The Act enables the Minister for Finance to provide stabilisation support to a credit union where it has been approved by the Central Bank. The Central Bank can only approve the provision of stabilisation support to a credit union if

· the credit union’s regulatory reserve is equal to or greater than 7.5% of the total assets of the credit union.

· the credit union is in the opinion of the Central Bank viable as a credit union.

· the Credit Union Fund contains funds for the provision of stabilisation support.

During the period in which the Credit Union Restructuring Board (ReBo) is in existence the Central Bank may not approve stabilisation support unless ReBo has recommended that a credit union be considered for stabilisation support.

The costs incurred in the provision of stabilisation assistance are to be fully funded by credit unions.

The consultation period will last until 25 April 2014. Interested parties are invited to make submissions by email to stabilisation@finance.gov.ie