Central Bank to relax rules on deposits of over €100,000
The Central Bank has climbed down and agreed to partially relax a key regulator rule that angered credit unions.
New regulations were introduced on January 1 that prevented credit unions from accepting deposits of more than €100,000 per member.
Credit unions were incensed by the move, which they said discriminated against them compared with banks. There are no rules restricting the size of deposits banks can hold.
Credit unions had threatened to make the imposition of the new €100,000 limit a general election issue.
They argue that it creates a false impression that credit unions are a "poor man's bank", not capable of looking after large amounts of money.
The deposit limit, and other regulatory changes, have been described as "draconian" by some in the sector.
Now the registrar of credit unions, who is part of the Central Bank, says she will set out a new process that would allow credit unions to accept deposits from their members that are more than the €100,000 limit.
Registrar Anne Marie McKiernan said she planned to shortly set out the application process for credit unions looking to either retain or accept new deposits in excess of the €100,000 limit.
She said the change of tack was a "further example of our responsiveness to adapting aspects of our regulatory rules where there is a good business reason to do so".
"In the coming weeks, we will set out our application processes for retention and for accepting new deposits over €100,000 and will liaise with the main representative bodies on this matter," she said at the Credit Union Development Association (CUDA) conference at the weekend.
Finance Minister Michael Noonan signed into law regulations at the end of last year that allow the Central Bank to make regulations for credit unions, including the one limiting the size of individual member deposits they can hold.
The Credit Union Advisory Committee, a statutory committee established last year to advise the Minister for Finance on credit union matters, will report in six months.
A spokesperson for the Irish League of Credit Unions said: "We are pleased that our lobbying campaign initiatives have succeeded in bringing us to this point."