Credit unions must pay an­other levy next year

The Irish Times - Business - - BUSINESS | NEWS - EOIN BURKE-KENNEDY

Credit unions will have to pay a fifth sta­bil­i­sa­tion levy con­tri­bu­tion next year un­der reg­u­la­tions signed into law by Min­is­ter for Fi­nance Paschal Dono­hoe.

The sta­bil­i­sa­tion fund was set up in the wake of the fi­nan­cial cri­sis as a back­stop for credit unions that need fi­nan­cial sup­port or aid to main­tain their re­serves.

The scheme aims to build up a fund of €30 mil­lion over 10 years. So far it has amassed just un­der €10 mil­lion. The levy and the amount that it raises will be re­viewed af­ter three years.

The out­come of the first re­view last year was to re­duce the rate of the levy (from 0.022 per cent to 0.017 per cent of to­tal as­sets) while still meet­ing the orig­i­nal tar­get of €30 mil­lion over a 10-year pe­riod due to growth in as­sets for the sec­tor.

Mr Dono­hoe has com­mit­ted to re­view the levy again be­fore the 2021 levy takes ef­fect.

Com­mis­sion

The in­tro­duc­tion of the sta­bil­i­sa­tion scheme was one of the rec­om­men­da­tions of the Com­mis­sion on Credit Unions which also ad­vised the scheme be funded by manda­tory con­tri­bu­tions from credit unions.

To be el­i­gi­ble for con­sid­er­a­tion for sta­bil­i­sa­tion sup­port, a credit union must have a reg­u­la­tory re­serve ra­tio equal to or greater than 7.5 per cent of the credit union’s to­tal as­sets and less than 10 per cent and must in the opin­ion of the Cen­tral Bank be vi­able as a credit union.

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.