Credit unions welcome scrapping of levy next year

Setting the Credit Union Institutions Resolution Fund levy at 0% for 2025 will save them a total of €2.5m

Irish League of Credit Unions CEO David Malone with the Governor of the Central Bank of Ireland Gabriel Makhlouf, and ILCU president Martin Busch. Picture: Robbie Reynolds

The Irish League of Credit Unions (ILCU) has welcomed the decision by Government to scrap the Credit Union Institutions Resolution Fund levy which it says will save its members €2.5m.

On Wednesday, Finance Minister Jack Chambers announced that the levy rate for 2025 has been set at 0%. This resolution fund is designed to provide a source of funding for the resolution of financial instability of a credit union if it is needed.

The levy was reduced based on a reasonable projection of the fund reaching its target of €65m in 2025. The fund is managed and administered by the Central Bank.

ILCU chief executive David Malone said this is good news for the credit union sector adding that the €2.5m will allow his members across the country to further invest in doing more for their “growing membership, supporting access to savings accounts, personal loans, current accounts and mortgages”.

Mr Chambers also announced that phase three of the Credit Union (Amendment) Act will come into effect next month.

This means credit unions will be allowed to refer members to another credit union to access a particular service and they will also be allowed to participate in loan syndication to share the risk of certain loans.

“This is an important development for the credit union movement which has big ambitions to expand its offering,” Mr Chambers said.

"It’s essential that Government supports this in the interest of customers and credit union members in our towns and villages across our country."