Credit unions asked to pay €30 million into new stabilisiation fund

Credit unions would be asked to pay a total of €30 million into a stabilisation fund under proposals being considered by Minister for Finance Michael Noonan.

The Minister yesterday began a round of consultations on proposals for a new fund designed specifically to prop up credit unions whose reserves fall below the levels required by law, but which are nonetheless viable in their own right.

Following on from the recommendations of a report last year, Mr Noonan is proposing to build up a fund of €30 million over six years, meaning the State’s 390 credit unions will have to pay €5 million annually.

However, under the proposals as they stand, the burden will not be shared equally and will instead be divided according to the size of each institution, with larger ones paying more. The top 28 unions, who have assets of €100 million and more, would pay €40,000 a year each. Those with €40 million and over would pay €16,000, and the smaller credit unions, with €10 million and over, would pay €4,000.

The proposed scheme would be mandatory.