The Government has cut to zero per cent a levy that credit unions have been paying into a fund set up to deal with any financial difficulties in the sector.

The Department of Finance has also announced that the third phase of legislation aimed at giving credit unions more flexibility to expand their services will come into effect on 30 September.

The rate for the Credit Institution Resolution Levy in 2025 will be set at 0% – down from 0.012007% of assets in 2024.

Review

The department said that the Minister for Finance Jack Chambers had cut the rate based on a projection that the fund would reach its €65 million target in 2025.

The Government is currently carrying out a review of the fund, after which it will decide on its future structure and use. It was set up in the wake of the financial crisis in 2011.

Minister Chambers also said that he would commence the third phase of the Credit Union (Amendment) Act 2023 on Monday (30 September).

Under the new provisions, credit unions will be allowed to engage in loan participation and loan syndication, meaning that they can share lending risks with other credit unions.

Referrals

Credit unions will also be allowed to refer members to another credit union, when they are unable to provide a service.

“This will allow credit unions to serve more people, and will ensure that, no matter where you live, you will be able to access the full suite of products offered by our credit unions,” said Neale Richmond, the minister responsible for the sector.

A separate measure allows boards to review plans and policies every three years, instead of annually.

This is aimed at allowing credit-union boards to better manage their own governance and to allow each board to concentrate on strategy and development.