Central Bank names firms to examine credit union sector
The Central Bank has appointed a number of major accountancy firms to help assist it with its increased regulation of the credit union sector.
The appointment of the firms comes against the background of 189 credit unions operating with lending restrictions with less than 10pc, or only 18, allowed to lend €40,000 and more.
This has prompted Fianna Fail's Michael McGrath to claim that the credit union sector "is now overburdened with regulatory restrictions and limitations which is stifling its growth potential".
The Central Bank has confirmed that six firms have been appointed to a multiple supplier framework agreement.
The bank received 14 separate tenders to carry out asset reviews of credit unions.
Inspections will focus on four areas - lending, investments, fixed assets and governance.
The firms that have been appointed are Deloitte & Touche, Ernst & Young, Grant Thornton, KPMG, EisnerAmperMKO Ltd and PwC.
In addition, the Central Bank has appointed six firms in respect of a multiple supplier framework agreement for credit union assessments and regulatory framework support.
The Central Bank received nine tenders for this work and has appointed Baker Tilly Ryan Glennon, Deloitte & Touche, Grant Thornton, EisnerAmperMKO Limited, KPMG and PwC.
Asked to comment on Deputy McGrath's claim, a spokesman for the Central Bank said: "The Central Bank recognises the distinct and important role that credit unions play in Irish society and the financial sector, and is committed to achieving our vision of financially strong, well governed credit unions providing services to current and new members.
He said: "It has been necessary to put lending restrictions in place in credit unions where there are regulatory concerns and resultant risk to members' savings.
"In February 2015 the Central Bank commenced a lending restriction review initiative, whereby credit unions that are subject to a lending restriction, but are satisfied that they have made the necessary improvements and have embedded these improvements in robust risk sensitive lending practices, may apply for a review of their lending restriction."
He said that where credit unions show compliance with the February requirements, lending restrictions will be lifted.
The closing date for submission of applications is September 30 next.