Credit Union Act 1997
F69 [ 45. — (1) In this section —
‘ assets ’ means such assets as the Bank may from time to time specify for the purposes of this section;
‘ regulatory reserve ’ means a reserve that is a realised financial reserve which is —
( a ) unrestricted and non-distributable,
( b ) identified separately in a credit union ’ s accounts, and
( c ) to be maintained by a credit union pursuant to this section;
‘ regulatory reserve requirement ’ means the amount required to be held in the regulatory reserve of a credit union, expressed as a percentage of the assets of a credit union and prescribed by the Bank.
(2) A credit union shall maintain reserves that are adequate having regard to the nature, scale, complexity and risk profile of its business.
(3) The Bank may prescribe the regulatory reserve requirement that a credit union shall maintain at a minimum and, in so prescribing, may include conditions on the application of the regulatory reserve requirement. For that purpose the Bank may also prescribe in respect of other matters related to the regulatory reserve requirement, including any of the following:
( a ) the application of risk weightings to assets for the purposes of calculating the regulatory reserve requirement;
( b ) the types and attributes of the assets or liabilities included in the calculation of the regulatory reserve requirement;
( c ) the requirement for initial reserves to be held by a newly-registered credit union under section 6 .
(4) Where requirements to which subsection (3)(c) relate have been prescribed, they shall not apply to a credit union established as a result of amalgamations of 2 or more existing credit unions.
(5) A credit union shall maintain reserves, in addition to the regulatory reserve requirement prescribed under subsection (3) that —
( a ) it has assessed are required in respect of operational risk having regard to the nature, scale, complexity and risk profile of its business, and
( b ) which shall not be less than those required under any additional reserve requirement applicable to it in respect of operational risk by virtue of subsection (6) .
(6) Either or both the level of additional reserves to be maintained by a credit union and the basis for calculating the additional reserves to be maintained by a credit union under this section in respect of operational risk may be prescribed by the Bank. For that purpose the Bank may also prescribe in respect of ancillary matters related to the additional reserves held in respect of operational risks.
(7) A credit union that fails to meet any reserve requirement under this section —
( a ) may be required by the Bank to transfer all or part of its surplus to reserves, and
( b ) shall secure the written approval of the Bank before paying a dividend or loan interest rebate.
(8) In prescribing matters for the purposes of this section, the Bank shall have regard to the need to ensure that the requirements imposed by the regulations made by it are effective and proportionate having regard to the nature, scale and complexity of credit unions, or of the category or categories of credit unions, to which the regulations will apply.
(9) ( a ) Pending the prescribing by the Bank of reserve requirements for the purposes of this section in respect of credit unions generally or a category of credit unions, the reserve requirements applicable to credit unions under section 85 shall continue to apply generally or to such category of credit unions, as the case may be.
( b ) Where reserve requirements have been prescribed by the Bank for the purposes of this section in respect of credit unions generally or a category of credit unions, then section 85 shall cease to apply generally to that category of credit unions, as the case may be, in respect of the matters so prescribed. ]
Substituted (1.01.2016) by Credit Union and Co-operation with Overseas Regulators Act 2012 (40/2012), s. 13, S.I. No. 584 of 2015.