CU Regulator

Regulator

Credit unions are now regulated by the Central Bank. Originally they were regulated by the Registrar of Friendly Societies. The 2003 plus 2004 reforms place the registrar of credit unions under the umbrella of the financial regulator. It is now under the umbrella of the Central Bank under the 2010 reform.

The Registrar of Credit Unions regulates credit unions on behalf of the Central Bank. The registrar of credit unions operates under the control of the Central Bank. The Bank may impose requirements as it considers necessary for the protection of savings of particular credit unions of a type. It may regulate lending practices, reporting of loans, capital and reserves, holding of liquid assets of a percentage of gross loan booked, systems controls and reporting arrangements.

Insolvency

A credit union may be wound up voluntarily or involuntarily. It may pass a resolution for its own winding up. This must be sent to the Central Bank certifying compliance with all provisions of the Credit Union Act. It must be published in Iris Oifigiúil.

A non-voluntary petition is made on petition by the Central Bank. The Central Bank may make the application if it appears as it is unable to pay sums sue, comply with the provisions of the legislation and the failure has continued after notice or less than half the members have a common bond.

Administrator

The Central Bank may appoint an administrator to a credit union to take over its management with a view to establishing proper administration and placing it on a sound financial footing. Where an administrators are put in place an examiner may not be appointed without prior consent of court. The functions of the directors and committees are transferred to the administrator as are the powers exercised for that general meeting.

Examiner

An examiner may be appointed to a credit union. The application may be made administrator may be appointed by the Central Bank. An examiner may be appointed on application by the credit union directors or a qualifying group of directors or members. The consent of the Central Bank is required.

The court may grant the application if it is satisfied there is a reasonable chance of survival. The examiner formulates proposals in the normal way for a scheme arrangement. This period of examinership is 70 days subject to extension.

Reserves

Credit unions must maintain adequate reserves, considering the nature, scale, complexity, and risk profile of their business. The level of reserves is prescribed by the Central Bank through regulations. They may also make  regulations for risk rating and alternative reserve requirements for newly formed credit unions.

In addition to regulatory reserves, reserves must match operational risk. The Central Bank may prescribe the amount of reserves concerning operational risks.

If a credit union fails to meet any reserve requirements, it may be required to transfer a part or all of its surplus reserve to reserves and must obtain approval from the Central Bank before paying dividends or loan interest rebates.

There is provision for an appeal against certain decisions of the Central Bank.