merrion street

The Minister for Finance, Mr Paschal Donohoe, has signed into law the Credit Union Fund (Stabilisation) Levy regulations.

Under the Regulations credit unions will be required to pay a stabilisation levy contribution in 2019. This stabilisation levy is the fifth in a series of annual levies that will be used to build up a Stabilisation Fund for credit unions.

The size of the Stabilisation Fund and the length of time it will take to build it up is reviewed every three years, with the first of these reviews having taken place in October 2017. The outcome of the review was to reduce the rate of the levy (from 0.022% to 0.017%) while still meeting the original target of €30 million over a ten year period due to growth in assets for the sector. The Minister for Finance has committed to a review of the levy again before the introduction of the 2021 levy.

The Credit Union Fund (Stabilisation) Levy Regulations, along with a Q&A are published on the Department of Finance website.

Background Information

The introduction of the Stabilisation scheme was one of the recommendations of the Commission on Credit Unions which also recommended that the scheme be funded by mandatory contributions from credit unions.

The target size for the Stabilisation Fund is €30 million to be built up over ten years. The size of the Fund and the length of time it will take to build it up will be reviewed every three years. On the basis of the results of these reviews any necessary adjustments can be made to the target size of the Fund and the number of years in which it should be built up.

To be eligible for consideration for Stabilisation support, a credit union must have a regulatory reserve ratio equal to or greater than 7.5% of the credit union’s total assets and less than 10% and must in the opinion of the Central Bank be viable as a credit union.

The Minister has made the Regulations under Section 59(3) of the Credit Union and Co-operation with Overseas Regulators Act 2012.