DUBLIN, Ireland—This country’s largely struggling credit unions are seeing a small change in their regulation at the same time a nationwide recapitalization is taking place.
Responsibility for oversight of credit unions is moving from the Financial Services Unit to the Shareholder Management Unit in the Department of Finance. The change follows a number of personnel changes, according to the department, with one regulator having left for the Central Bank and another key person involved in a separate action.
Murray McCarter has been named to oversee credit unions, but his department will include many of the same staff that had been in charge of credit unions in the Financial Services Division who have now moved to the Shareholder Management Unit.
Ireland’s credit unions now have available to them as much as €250m as part of an effort to restructure and recapitalize credit unions in advance of new capital rules that go into effect in 2015. Those rules will require credit unions to have at least 10% capital.
But not every credit union is eligible to tap the funds being made available by the government. To qualify, a credit union must have minimum reserves of 7.5% and must be judged by the Central Bank as a “viable entity.” The government said earlier this year it would be imposing a levy on all CUs to help underwrite a €30m stabilization fund over the next six years.
The new rules, along with ongoing challenges being felt by many CUs in the Emerald Isle, has led to a number of mergers. At year-end 2013, there were 390 credit unions in Ireland with total assets of just under €14bn. Of these, 195 have assets of less than €20m; 167 have asset of between €20m-€100m; and 28 have assets of over €100m. There are 20 credit unions with a total deficit of €11m, according to regulators.