Finance Minister Michael Noonan has today published the Credit Union Bill 2012.
The new bill gives effect to many of the recommendations of the final report of the Commission on Credit Unions.
This was agreed unanimously by the Commission’s members, including credit union stakeholders.
Mr Noonan said the Bill deals with four broad areas - prudential regulation, governance, restructuring and stabilisation.
The main points of the bill include a framework for the prudential requirements that are to apply to credit unions in areas such as reserves, liquidity, lending and risk management.
The policies and principles in respect of each area are set out in the Bill, with scope for Central Bank regulations in relation to standards, procedures and other more detailed matters.
It has also been agreed that the Central Bank will adopt a consultation protocol for engaging with credit unions and will also conduct a regulatory impact analysis when setting out new regulations.
Credit unions will now become subject to the Central Bank’s administrative sanction procedure, with recourse to an appeal via the Irish Financial Services Appeals Tribunal.
The new bill also provides the statutory basis for the restructuring of credit unions. It indicates that restructuring is to be achieved on a voluntary, incentivised and time-bound basis over a four-year period. The main aims of restructuring are the protection of credit union members’ savings, the stability and viability of credit unions and the sector in general and the preservation of the credit union identity and ethos.
''The publication of the Credit Union Bill 2012 will strengthen the regulatory framework for credit unions and provide the basis for a restructuring of the sector over time in a way that is stable and protects credit union members,'' the Finance Minister said.
The Registrar of Credit Unions, James O'Brien, said the bill represents a pivotal moment in the history of the credit union sector.
''This bill creates a modern regulatory framework within which credit unions can develop prudently and provides for the necessary restructuring of the sector to make it sustainable into the future,'' he said.
The Registrar said the early implementation of all of the recommendations contained in the Commission report is vital. ''This is important to enable the beginning of a process of credit union sector reshaping and development founded on good governance, robust systems and strong balance sheets,'' he added.