Oireachtas Joint and Select Committees

Thursday, 5 May 2022

Public Accounts Committee

2020 Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 7 - Finance
2020 Report on the Accounts of the Public Services of the Comptroller and Auditor General
Chapter 1 - Exchequer Financial Outturn for 2020
Chapter 16 - Ireland Apple Escrow Fund
Audited Financial Statements of the Exchequer for 2020

9:30 am

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein) | Oireachtas source

It is just under 100%. For credit unions, it is 26%. The figure I had for last year was 27% but we will settle on 26%, which is about a quarter. We are talking about viability. There is a pot of money there of €17 billion. I am not advocating crazy lending like the banks did in the 2000s. Around 50% would seem like a safe bet because the assets would be there even if everybody defaulted and everything went belly-up. The credit unions have had their hands tied behind their backs and a blindfold or a bag pulled over their heads. They are suffocated and prevented from getting into the mortgage market. A credit union with €70 million to lend can only do 14 mortgages at €250,000 each. That is all it can do. In other countries like Canada, Australia or the USA, there is more of a level playing field. Those are not exactly communist states or anything like that. We are talking about America, for God's sake. They seem to be able to allow the credit unions to play a bigger role.

The witnesses advise the Government on these policy decisions. There is a need to move this issue on because it has been going on for years. When we were caught in the middle of the recession and just starting to emerge from it, everybody was scratching their heads and asking what to do about housing. The credit unions said they wanted to intervene and help. I have a letter here from a local credit union saying that due to the regulatory caps being imposed and the regulations on the ability to provide mortgages, the cap is 7.5% of assets in business and home loans, so it is effectively stopped before it starts. This credit union has assets of €67 million and 7.5% of that is €4.9 million. Its existing business and home loan book amounts to just over €2 million. It has potential for a lot more. With the value of an average mortgage being €250,000, this credit union has the potential to give out only nine mortgages in total. It seems the credit union movement is being held back. The witnesses may not be able to give me a detailed answer to this question but do the banks lobby the Department of Finance very heavily on these matters? The witnesses may have only been in their roles a short time, but do they know what the situation has been over the years? Is there a lot of lobbying from the pillar banks - the banks we bailed out?

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