Irish credit unions must keep a set amount in a deposit protection account with the Central Bank from the end of November, Minister for Finance Michael Noonan said today.
Mr Noonan has signed the order which brings into effect a regulation compelling each credit union to maintain an amount equal to 0.2 per cent of their 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 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 today 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," the registrar of credit unions, James O'Brien.
"We also believe that the introduction of this framework will enhance the ability of credit unions to continue to attract high quality volunteers with the necessary skills and expertise to progress the development of the sector. "
