The Government has reduced the rate of the levy rate for the resolution fund for credit unions to 0% next year.
The Department of Finance said the decision had been taken because the Credit Institutions Resolution Fund (CRIF) is projected to reach its target of €65m next year with further interest income earned.
It added that a review of the resolution funds is ongoing and the outcome will inform the future structure and use of the fund.
“Today’s position for the 2025 levy is without prejudice to the outcome of the ongoing review of the fund,” said Minister for Finance, Jack Chambers.
“Any potential changes to the fund will be based on the findings of this comprehensive review, and there may be a need to increase the target size of the CIRF and adjust the collection of levies in future contribution periods.”
The fund is designed to provide a source of funding for the resolution of financial instability in, or an imminent serious threat to the financial stability of, a credit institution.
Credit unions contribute to the fund through a levy and the move should therefore help to lower their costs next year.
The target size of the fund was set in 2019 following a review of the levy.
The development came as the department confirmed that the third phase of the Credit Union (Amendment) Act will come into effect on Monday.
The measures will allow credit unions to engage in loan participation and loan syndication.
It will also enable them to refer members to another credit union where they are unable to provide a service.
Boards will also be allowed to review plans and policies every three years instead of annually.
This will allow them to better manage their own governance and to allow each board to concentrate on strategy and development.
“The commencement of Phase 3 will have far-reaching positive implications for the credit union sector in the years to come,” said Mr Chambers.
“This is an important development for the Credit Union movement which has big ambitions to expand its offering.”
