Credit union regulations coming into force
CREDIT UNIONS will have to keep a set amount of cash on deposit with the Central Bank in a deposit protection account from the end of November, Minister for Finance Michael Noonan said yesterday.
Mr Noonan has signed an order that brings into effect a regulation compelling each credit union to maintain an amount equal to 0.2 per cent of its deposits and shares in the account from November 30th.
The Minister also signed an order under the Central Bank Reform Act that gives the bank powers to set out regulations and a code of fitness and probity for credit unions.
The new regulation governing deposits is in return for protection offered under the Deposit Guarantee Scheme, which is currently 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,” the Department of Finance said in a statement.
The Central Bank’s new powers to introduce standards for credit unions will be brought in on a phased basis, with consultation with the sector beginning by the end of the year.
The Central Bank welcomed the move, describing it as an important step in strengthening the regulatory framework to protect members’ savings.
“We believe that well-governed credit unions can play an important role in the financial services sector,” said James O’Brien, the registrar of credit unions.