Seán Sherlock (Cork East, Labour)
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75. To ask the Minister for Finance if he will address a matter (details supplied) regarding credit unions. [27678/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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In response to the seven questions raised by the Deputy, the Central Bank of Ireland (Central Bank) have provided me with a response on each of the issues which are set out below:

1. Following the High Court appointment of the Joint Liquidators to the Credit Union referred to in the details supplied on 17 June 2020, the Central Bank published the partially redacted Resolution Report and Affidavit on the Central Bank’s website. The resolution report and affidavit were redacted in line with legislation applying to the publication of such information by the Central Bank.

1.2 No application for stabilisation support from the Stabilisation Fund was received by the Central Bank from the credit union in question.

1.2 Pages 32-43 of the partially redacted Resolution Report details the Central Bank's consideration of the circumstances pertaining to the Credit Union and the reasons for liquidation.

1.2 Adequate reserves support a credit union’s operations, provide a base for future growth and protect against the risk of unforeseen losses. Credit unions need to maintain sufficient reserves to ensure continuity and to protect members’ savings. The Central Bank may consider the imposition of lending restrictions in credit unions with higher financial, operational and/or governance concerns. The partially redacted Resolution Report and Affidavit details the Central Bank’s regulatory interaction and consideration of the circumstances pertaining to the Credit Union in question and the reasons for liquidation.

1.2 There are currently lending restrictions in place in 20 credit unions.

1.2 The partially redacted Resolution Report and Affidavit details the Central Bank’s consideration of the circumstances pertaining to the credit union in question and the reasons for liquidation. The partially redacted Resolution Report and Affidavit references the Central Bank and Credit Institutions (Resolution) Act 2011 (2011 Act), which provides the Central Bank with powers to present a petition for the winding-up of a credit institution (including a credit union) under any of the five grounds specified in section 77 of the 2011 Act, being that:

1 a) in the opinion of the Central Bank, the winding-up of that credit institution would be in the public interest;

1 b) the credit institution is, or in the opinion of the Central Bank may be, unable to meet its obligations to its creditors;

1 c) the credit institution has failed to comply with a direction of the Central Bank;

1 i. in the case of the holder of a licence under section 9 of the Central Bank Act 1971, under section 21 of that Act, or

1 ii. in the case of a building society, under section 40 (2) of the Building Societies Act 1989, or

1 iii. in the case of a credit union, under section 87 of the Credit Union Act 1997;

1 d) the credit institution’s licence or authorisation (as applicable) has been revoked and (in the case of the holder of a licence under section 9 of the Bank Act 1971) that it has ceased to carry on banking business; or

1 e) the Central Bank considers that it is in the interest of persons having deposits (including deposits on current accounts) with that credit institution that it be wound-up.

1.2 The Central Bank’s statutory mandate is to ensure the protection by each credit union of the funds of its members and maintenance of the financial stability and well-being of credit unions generally. The Central Bank notes the presence of alternative financial services in the area of the Credit Union referred to (including neighbouring credit unions) and understands that the appointed liquidator has been in communication with affected members in this regard.