Including licensed credit unions under the depositors’ compensation scheme could lead to seven-figure claims in the event of a collapse.
That was the warning from Treasury Minister Eddie Teare, in response to a question from Douglas West MHK Chris Thomas about the implications of such a move.
Mr Thomas told the House of Keys his calculations showed the potential cost and liability of including credit unions was not as high as the Council of Ministers thought.
The Treasury Minister said: ‘The FSC [Financial Supervision Commission] rule book could be modified but we have to work out who will pick up the tab in the event of something going wrong.’
In the UK, it is the taxpayer. He said there were competing interests for taxpayers’ money. Any such move would require primary legislation to be amended.
The DCS protects deposits up to £50,000 with Isle of Man offices of banks licensed by the FSC.