Credit Union Resolution and Stabilisation Funds to be maintained at current size
- Foilsithe:
- An t-eolas is déanaí: 27 Lúnasa 2025
The Minister for Finance, Paschal Donohoe TD, and Minister of State with responsibility for Financial Services, Credit Unions, and Insurance, Robert Troy TD, have today published recommendations on the Credit Union Resolution and Stabilisation Funds. This follows a review and public consultation on the future use and structure of the Funds for the credit union sector. The papers outlining the recommendations on the Funds are available on the Department of Finance website.
One of the key recommendations proposes that the levy rate for the Credit Institutions Resolution Fund and Credit Union Stabilisation Fund be set at 0% for 2026 and beyond, subject to the completion of statutory consultation and certain conditions prevailing. This represents a considerable reduction from the €5.3 million that was collected by levy in respect of these Funds in 2023.
Taking into account submissions to the consultation, stakeholder engagement, and high-level analysis, the proposal to pause the collection of levies in relation to these funds was made on the basis that the net assets of the funds are currently sufficient with ongoing interest accumulating.
Minister for Finance, Paschal Donohoe TD, commented:
“I am pleased to announce our intention to pause the collection of levies in relation to the Resolution and Stabilisation Funds for the credit union sector for the foreseeable future.
This decision was taken against the backdrop of the current assets of the funds being sufficient for now, the current reserve strength of the sector, and is subject to certain conditions being met. Providing the credit union sector with some certainty in relation to the collection of these levies allows the sector to better plan their strategies and manage their finances for the years ahead.
I would like to thank all those who responded to the public consultation and who engaged with my Department during the course of this review.”
Minister of State for Credit Unions, Robert Troy TD, welcomed the news saying:
“The announcement of today’s proposal to pause the collection of levies will assist in reducing costs for credit unions and will provide additional capacity for the sector to invest in and provide vital services to the communities that they serve.
Since taking on my role as Minister with responsibility for Credit Unions, I have seen first-hand the work that credit unions undertake to support their communities. I am committed to working with the sector to fully realise the potential of the sector as a community-centric financial institution, enhance the ability of the sector to better serve its members, and ensure that the sector leverages any opportunities presented to it in line with the commitments in the Programme for Government.
The proposal to pause the collection of levies reflects the increased resilience and the evolution of the credit union sector since the crisis-era when the safety nets of the Resolution Fund and Stabilisation Fund were initially put in place.
I look forward to working with the sector to improve competitiveness, sustainably expand the sector, and continue to meet their members’ and communities’ needs now and into the future.”
ENDS
Notes to Editor
Resolution Fund
The Central Bank and Credit Institutions (Resolution) Act 2011 established a resolution regime for credit institutions and credit unions in Ireland. The Credit Institutions Resolution Fund (Resolution Fund) was established under this legislation to support resolution actions in the State and is managed and administered by the Central Bank. The net assets of the Resolution Fund were €65.5 million as at 30 June 2025.
The purpose of the Resolution Fund is to provide a source of funding for the resolution of financial instability in, or an imminent serious threat to the financial stability of, an authorised credit institution, and in particular:
- to provide funds for any payment required,
- to provide capital for a bridge-bank, with the written consent of the Minister, and
- to meet expenses of the Central Bank in discharging its functions under the 2011 Act.
Credit unions are now the only financial institutions contributing to the Resolution Fund as other financial institutions are now covered by the Single Resolution Mechanism which has resulted in Irish Banks paying into the Single Resolution Fund.
The Department of Finance, in collaboration with the Central Bank of Ireland, carried out a review of the levy in 2019, which included a public consultation. Following this review, it was decided that the target size of the Resolution Fund should be set at €65 million and that this target should be met by 2025.
The Department of Finance prepares the annual Levy Regulations following consultation with the Central Bank and the Credit Union Advisory Committee. These regulations come into force on 1 October each year and prescribe the rate of contribution or method of calculating the rate of contribution to the Resolution Fund.
Stabilisation Fund
The Stabilisation Fund is financial support provided to a credit union to restore and facilitate maintenance of a credit union’s reserve requirement.
Under section 59(3) of the Credit Union and Co-Operation with Overseas Regulators Act (“the CUCOR Act”), the Minister for Finance is required to make regulations prescribing the rate of contribution or a method of calculating the rate of contribution to the Stabilisation Fund, which is a part of the Credit Union Fund. There is €21.3 million in the Stabilisation Fund as at 30 June 2025.
To enable the levy to vary from year-to-year, regulations have been made annually prescribing the rate of the levy and the basis on which it will be charged. The CUCOR Act requires that the Minister consult the Central Bank, Credit Union Advisory Committee, and Credit Union Restructuring Board before prescribing the annual levy rate each year.
In making the regulations for the Stabilisation Levy, the Minister must have regard to the need:
- for the Stabilisation Fund to grow, over time, to a size commensurate to the costs that might be incurred in providing stabilisation support under Part 4 of the Act
- And for the rate of contribution by a credit union, or category of credit unions, to be consistent with maintaining the financial viability and sustaining the commercial position of such credit unions.