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10pc levy for credit unions

CREDIT unions across Ireland will have to stump up a levy towards a new State bailout fund.

The Savings Protection Scheme (SPS), which is owned and operated by Irish League of Credit Unions, will come under the control of regulators at the Central Bank.

The SPS was set up by the league to provide emergency funding to ailing member unions.

It's understood that there had been €120m in the fund, but that at least 20 credit unions sought support from it -- leaving €70m remaining.

Ireland's 407 credit unions have some €12.6bn on deposit. Regulators in the Central Bank want every credit union to put aside 10pc of the value of its loan book into reserves this year.

The Minister for Finance believes that the bailout fund needs to be beefed up to counter rising member loan arrears. Almost €1bn worth of loans at credit unions here have not been paid for 10 weeks or more.

In addition, the rules on the fitness of credit union directors may also be drawn up by the Central Bank.