The Minister for Finance, Paschal Donohoe TD today (Friday (9th, October) announced that the Credit Institution Resolution Levy for 2021 will be reduced to 0.0259% of assets (approximately €5 million) and the Credit Union Stabilisation Levy for 2021 will be reduced to 0.0015544% of assets (approximately €300,000).
Collectively the levies of €5.3 million for 2021 will amount to approximately 0.0274% of assets, a reduction of circa 56% from €12 million in 2019 in the context of growing sector assets.
Minister Donohoe noted that: ‘Credit unions play an important role in local communities as a volunteer co-operative movement. Having taken into consideration my legislative responsibilities, the views of the sector, the Credit Union Advisory Committee, and the Central Bank, and in the context of the current environment that credit unions are operating in, I believe that the revised levy rates are appropriate’.
Minister Fleming adding to this noted that: ‘As Minister for State with responsibility for financial services, credit unions, and insurance, my priority is to help the credit union sector strengthen and grow’.
“As an ‘essential service’, credit unions have worked hard to support members in communities across Ireland and have remained open throughout the pandemic. Credit unions are also well positioned to support the economic recovery through increasing lending, including mortgage and SME lending, to their communities’.”
Following completion of the statutory consultation process, Minister Donohoe, signed into law the Credit Institutions Resolution Fund Levy regulations and will sign the Stabilisation Fund Levy regulations in the coming weeks.
Notwithstanding the reduction in the levy rates, the Resolution and Stabilisation Funds will remain well funded safety nets for credit unions and their members.
Given the uncertainty relating to the pandemic, no decision was taken in relation to the target size of the Stabilisation Fund. The levy rate will be reviewed as required by law during 2021.
Department officials have also received feedback from the sector representatives on a framework for the operation of the Stabilisation Scheme, which is currently being considered.