Credit unions to pay double banks’ fee for guarantee
If banks and building societies paid fees at the same rate as 508 smaller credit unions, taxpayers would earn an extra €850 million in two years.
In relation to the credit unions the Department of Finance confirmed the movement will be levied 20 cents for every €100 of assets held (0.2%).
This emerged after Finance Minister Brian Lenihan included credit unions in deposit protection law published last week. It means this year the Irish League of Credit Unions (ILCU) will pay between €25m and €28m to underpin €14 billion in assets.
For the 12-month period ending in September the seven institutions under the general guarantee, including AIB, Bank of Ireland, Irish Nationwide and Anglo Irish, will pay €455m to the Central Bank to cover €440bn worth of assets.
This is about 10 cent for every €100. If levied at the same level as the credit unions, the State would recoup an extra €425m each year in charges from the banks.
The ILCU said it had not received confirmation of the fee and had not finalised arrangements as to how it will pay or if individual unions will be levied. Despite bullish statements at the ILCU’s AGM, some unions have come under pressure.
Labour Party’s finance spokeswoman Joan Burton said the disparity revealed the “amazing” deal negotiated with the big banks last September. “If the banks were managed in the same way as the credit unions we might not have half the amount of difficulty. The minister needs to explain exactly how the banks’ figure was computed.”
Last week Mr Lenihan informed Ms Burton the banks have been excused of €90m worth of fees. He said the initial €1bn fee, over two years, included a portion relating to a deposit protection scheme. This has been removed. He said the banks were not levied at a higher rate in order to aid recovery prospects.
