Fraction of money for reform of credit union sector used

Credit Union Restructuring Board to be wound down after Government report

The Credit Union Restructuring Board (ReBo) is to be wound down after using just a fraction of the money set aside for it to carry out its reform of the sector, a report from the Department of Finance showed on Friday.

ReBo was established in 2013 on foot of a recommendation from the Commission on Credit Unions in 2012. The sector had been under pressure due to the economic downturn, with loan arrears reported to be €1 billion.

The then minister for finance, Michael Noonan, set aside €500 million for ReBo to carry out its work. However, the report by the Department of Finance reveals that just €20 million was used.

“While it was envisaged that restructuring would require significant funding, the credit union movement itself provided financial support from within its own resources and minimised the call on exchequer funding,” said the report.


“It was a huge achievement for ReBo to complete 82 projects involving 156 credit unions across 24 counties and to accomplish this in a tight timeframe using only circa €20 million.”

The Department concluded that ReBo had completed its task and recommended the “orderly wind-down” of its operations.

The report said that from 2006-2016 the number of credit unions with an asset size of less than €20 million had decreased by 58 per cent from 230 to 97. Over the same period, the number with an asset size of €20 million to €100 million had fallen by 11 per cent.

Over the same period, the number of credit unions with assets of more than €100 million had increased by 66 per cent. The figures indicate that the restructuring process resulted in smaller credit unions merging with larger credit unions.

There was also a corresponding increase in asset size in larger credit unions. Currently, 51 credit unions have assets equal to or greater than €100 million.

Furthermore, credit unions’ loan-to-asset ratio currently remains at an “all-time low” of 27 per cent on average. This is down from a peak of 52 per cent in 2008.

Department of Finance second secretary Ann Nolan said legislation would be brought forward in due course to allow for ReBo's formal dissolution.

“The story of ReBo is unquestionably a good-news story, given its short life span, the high level of restructuring projects it has overseen and facilitated, and with minimal drawdown from the credit union fund,” she said. “The fact that the sector itself has funded much of the cost of restructuring under ReBo is also admirable.”

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter