ILCU welcomes minister's change to credit union levies

The Credit Institution Resolution Levy for 2021 is to be reduced to approximately €5 million. File photo

The Credit Union Stabilisation Levy will be reduced to approximately €300,000. 

Minister for Finance Paschal Donohoe announced the reduction today along with the news that the Credit Institution Resolution Levy for 2021 will be reduced to 0.0259% of assets, approximately €5 million.

Commenting on the change, Mr Donohoe noted the societal importance of credit unions.

"Credit unions play an important role in local communities as a volunteer co-operative movement.

Having taken into consideration my legislative responsibilities, the views of the sector, the Credit Union Advisory Committee, and the Central Bank, and in the context of the current environment that credit unions are operating in, I believe that the revised levy rates are appropriate."

He is due to sign the Stabilisation Fund Levy regulations in the next few weeks. Given the uncertainty of the pandemic, the levy rate will be reviewed next year.

CEO of the Credit Union Development Association, Kevin Johnson said the change in the levy will impact many Credit Unions across the country.

"This substantial reduction of the stabilisation fund charge levied on credit unions means that for a CU with €100m in assets the levy in 2021 would have been €16,400, but will now be reduced to €1,554 for this year."

Meanwhile, the Irish League of Credit Unions said today's announcement was a result of several years of lobbying.

Last July, the ILCU, outlined the impact of such levies on not for profit credit unions in letters to the Paschal Donohoe. 

CEO Ed Farrell said "Last year, the ILCU was successful in achieving a 44% decrease in the CIRF levy on behalf of its member credit unions. The further decrease in the CIRF levy announced today, approximately €250,000, means credit unions will pay €4.4m in 2021, compared to €8.6m they paid in 2019, an overall reduction of €4.2m.”