Credit union talks on debt begin
Finance Minister Michael Noonan says outcome will 'greatly enhance the stability' of the institution
The Irish League of Credit Unions (ICLU) and the Central Bank have commenced negotiations aimed at thrashing out details regarding the planned introduction of a statutory resolution scheme for the sector as it struggles under the weight of mounting arrears.
In a statement issued yesterday, the ICLU said that it has engaged in the talks to develop an "appropriate strategy to support the credit union movement".
The negotiations are a prelude to the establishment, by the Government, of a commission for credit unions, which will be done under its programme for government as part of an undertaking with the bailout troika of the IMF, ECB and European Union to develop a long-term strategy for the country's credit unions.
Finance Minister Michael Noonan said in the Dail last month that the commission would be formed in "due course" and once a blueprint strategy has been agreed between the ICLU and the regulator.
A spokeswoman for the ICLU declined to say yesterday when the initial talks with the Central Bank are likely to conclude.
Mark Bailey, president of the ICLU -- which holds its annual general meeting in Belfast today -- said that discussions with the Central Bank have been "constructive and purposeful with a shared intent to ensure that the future of credit unions can be assured and supported".
In its annual report, published last month, the ICLU said that of the 419 credit unions it represents in the Republic, 20 had sought financial assistance from an emergency fund to bail out troubled member unions.
The ICLU had set aside €48m in its accounts to cover guarantees it gave to unions in difficulty.
At today's AGM, member unions will be asked to approve a plan for a special levy, which will raise an additional €6m a year to boost the ICLU's Savings Protection Scheme (SPS) fund. About 11pc of credit union loans were in arrears last year.
Mr Noonan yesterday welcomed the dialogue between the ICLU and the Central Bank, saying that structures to protect credit union members needed to be "refreshed and renewed" in light of the financial crisis.
He added that the new resolution framework, which will be managed by the Central Bank, will "greatly enhance the stability of the sector into the future".