A FOUR-year process part-funded by the State that would see the substantial restructuring of the Credit Union sector has been recommended in a new report.

The key recommendations of the report of the Commission on Credit Unions are to form the basis of legislation to be published by the end of June.

A new restructuring board is to be established to oversee a four-year programme whereby, by way of amalgamations and transfers, the credit union sector is to undergo strengthening.

Meanwhile new governance rules are to be introduced that will be calibrated according to the size and complexity of the credit unions to which they apply.

Launching the report yesterday, the chairman of the commission, Prof Donal McKillop, said the new board would not “shepherd into an arranged marriage” credit unions that were considered not to be fit for purpose.

As of the end of last year, of the 403 credit unions that submitted prudential returns in the Republic, 51 had total realised reserves that were less than 10 per cent of assets, and 25 were considered “seriously undercapitalised”.