Minister pauses credit union levies for 'foreseeable future'

Minister of finance Paschal Donohoe said the move 'is subject to certain conditions being met'

The levy was reduced to 0% for 2025 as the fund had reached its target of raising €65m. As of June 30 this year, the value of the fund stood at €65.5m. File picture: Stephen Collins/Collins Photos

Minister of finance Paschal Donohoe has announced the collection of levies on the credit union sector in relation to the Resolution and Stabilisation Fund will be paused for the “foreseeable future”.

The fund was established under the Central Bank and Credit Institutions (Resolution) Act 2011 and was 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 to 0% for 2025 as the fund had reached its target of raising €65m. As of June 30 this year, the value of the fund stood at €65.5m. In 2023, €5.3m was collected in levies for the fund.

Credit unions are 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.

On Wednesday, Mr Donohoe published recommendations on the Credit Union Resolution and Stabilisation Funds following a review and a public consultation on the future use and structure of the fund.

One of the key recommendations was that the levy continue to be set at 0% for 2026 and beyond, subject to the completion of statutory consultation and certain conditions prevailing.

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Mr Donohoe said the intention is 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,” he said.

“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.”