Press release
Credit Union Sector Resolution Levy halved
Published on
Last updated on
Published on
Last updated on
The Minister for Finance today announced that the Credit Institution Resolution Levy for 2024 will be reduced to €2.5 million, a 50% decrease from €5 million in 2023.
Jennifer Carroll MacNeill, Minister of State for Financial Services, Credit Unions said of this positive measure:
“Cutting the Resolution Levy in half to €2.5 million is the right decision and will help reduce costs for local Credit Unions who provide vital financial services to individual members, families and businesses in their across the country.
"This reduction in levy rate has been made on the basis that a substantial review of both the Resolution Levy and the Stabilisation Levy will be carried out by officials in the Department of Finance in 2024.
"Significantly, the levy reduction does not impact on the Resolution Fund itself, which remains on course to meet its target size of €65 million in 2025.”
The levy rate will be set at 0.012007% a reduction from 0.024725% of assets in 2023. The Resolution Levy will increase the size of the Resolution Fund by €2.5 million per annum.
Following completion of the statutory consultation process, the Minister for Finance, Michael McGrath, signed into law the Credit Institutions Resolution Fund Levy regulations.
The Resolution Fund remains a well-capitalised bulwark for credit unions and their members.
The Central Bank and Credit Institutions (Resolution) Act 2011 established a resolution regime for credit institutions and credit unions in Ireland. The Credit Institutions Resolution Fund (Resolution Fund) was established under this legislation to support resolution actions in the State, and is managed and administered by the Central Bank.
Credit unions are now 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.
The Department of Finance, in collaboration with the Central Bank of Ireland, carried out a review of the levy in 2019, which included a public consultation. Following this review it was decided that the target size of the Resolution Fund should be set at €65 million and that this target should be met by 2025.
The Minister for Finance has now agreed that the Resolution Levy for 2024 to be reduced at circa €2.5 million per annum to allow the fund to continue to grow to €65 million to 2025.
The levy rate for 2024 will be set at 0.012007% in the regulations, a reduction in the levy rate from 0.024725% of assets in 2023. The levy rate will be reviewed as required by law during 2024.
The Department of Finance prepares the annual Levy Regulations following consultation with the Central Bank and the Credit Union Advisory Committee. These regulations come into force on 30 September each year and prescribe the rate of contribution or method of calculating the rate of contribution to the Resolution Fund.