Mr. Tim Molan:

I thank the members of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach for their kind invitation to meet them. The Credit Union Managers Association, CUMA, represents CEOs and senior managers of credit unions in the Republic of Ireland and Northern Ireland. Our members manage the daily interactions with a membership of approximately 3 million people. In the Republic of Ireland, while the number of credit unions has declined in recent years owing to mergers, the number of credit union offices has not. We still manage services across more than 400 offices. Our services are delivered through a variety of channels, people to people, by telephone and online. We continue to evolve and improve these service offerings.

Ours is the largest movement of co-operatives on the island of Ireland, owned and governed by our members and their representatives and staffed by committed and highly qualified professionals. Ours are not-for-profit co-ops, born out of and embedded in communities. Our service to members, the overwhelming majority of the public, is driven by the member interest of that element of the Irish public. Our co-ops are and remain the original public interest financial institutions operating in the financial services sector. We are, undoubtedly, pleased that for four years in a row credit unions have been voted number one for customer experience in the CXi, Ireland customer experience report. That has never happened anywhere else worldwide and it is a tribute to the member-centric, service culture of our 4,000 staff members and directors spread throughout urban and rural areas. For more than 50 years we have delivered excellent services in communities. We have responsibly built up our reserves and expertise. We have quietly and purposefully provided savings and loans facilities, survived recession without any bailout and are expanding our loan books again to meet renewing member demand. We enforced member care before mainstream banking had customer care imposed on them. We adopted and adapted to regulation when it was imposed. We adapted to accelerated mergers and are adapting to new demands as our members' needs change. Throughout that time we continued to deliver our core business.

Since our inception we have lent money for personal and commercial purposes. We still do so today. Loans for commercial purposes have been part of the lending portfolios of credit unions for many years and still are. The 2016 credit union regulations gave greater definition to commercial loans and limited commercial lending to 50% of a credit union's regulatory reserve, which is equivalent to 5% of the overall assets of a credit union if it holds the minimum reserve requirements. In March 2018 commercial loans accounted for 1.9% of the €4.5 billion credit unions had out on loan. It was equivalent to 0.51% of our assets.

Given that we could be lending up to 5%, or more where there are higher regulatory reserves, there is considerable headroom in credit unions for greater levels of commercial lending in suitable circumstances. Credit unions have both a public interest and a member interest to serve and must lend responsibly. We need the frameworks, policies, procedures, systems, personnel and expertise to continue to lend responsibly, including when we are lending in the commercial domain. These standards should apply to all financial institutions and other entrants in this sphere. There was in the past and is currently a willingness to address the standards expected by regulation. There is an expectation and evidence of increasing engagement by small local businesses with credit unions. We are open for business and anxious to engage meaningfully and responsibly with the members and future members of communities. We invite commercial interests in communities to come and talk to us.