Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein) | Oireachtas source

I welcome the opportunity to speak on this important Bill. I echo the comments of a number of previous speakers, from my own party and others, in commending the credit union movement on its contribution to Irish life and communities right across the island. As outlined by my party colleague and spokesperson on finance, Deputy Pearse Doherty, in his contribution to this debate last week, Sinn Féin broadly supports the Bill but will be tabling amendments intended to improve and strengthen it.

We recognise the vital role local credit unions play in the communities they serve, founded as they are on an ethos of community service, volunteerism and not-for-profit activity. As ordinary people struggle on a daily basis to pay bills and manage their household budgets in the face of further and seemingly endless cuts by the Government, as with its predecessor, the importance of the local credit union becomes further pronounced. Credit unions, for as long as I can remember, have helped people by way of neighbours helping neighbours, through short-term loans to help send children back to school or to provide for Christmas. They stepped in when banks did not want to know. In doing so, they ensured low- and middle-income families could avoid the clutches of loan sharks and unscrupulous lenders who charge exorbitant interest rates. Credit unions have provided and continue to provide a vital social service.

The Bill deals with four broad areas: prudential regulation, governance, restructuring and stabilisation. We support the demand for good practice, transparency and probity, the implementation of agreed standards and necessary accountability. It is agreed by all that the regulatory context in which credit unions operate is in need of substantial reform. The movement itself has been among the leading voices in calling for this reform.

We support strong, effective and appropriate regulation for the credit union sector. We want credit unions, their members and the communities in which they are rooted to have the highest levels of protection, probity, and governance. This is in the best interest of all who provide these services and all who avail of them. However, we firmly believe this can be achieved in a manner that is consistent with the distinctive ethos and values of the sector. It should not be the case that that which is applied to the banking sector is automatically extended to credit unions. It must be recognised that appropriate regulation for one type of financial institution may not be appropriate for another.

If credit unions are to be able to grow and service the increasingly varied needs of the members and communities they serve, they will need to be able to offer a wider range of services. I include the ability to undertake transactions and access services above and beyond those that are currently available. The sharing of services should be facilitated and promoted. We have the opportunity and responsibility, with this Bill, to address specific restrictions on credit unions that go completely against the spirit and purpose of the organisation. The decision by the Financial Regulator to cap a family's borrowing at €25,000 is one such example.

This outrageous restriction has resulted in dire consequences for many families. It is wholly too limiting and fails to appreciate and understand the demands that present in a household, particularly where there are a number of children, and especially if they are third level college attendees or aspirants. This diktat by Mr. Elderfield must be revisited and, at the very least, significantly relaxed.

I ask the Minister to note the situation that applies. No cognisance is taken in regard to the collective income in a household or the number of income earners. It is literally a blanket restriction applying to the members of a particular household, and that is outrageous. I repeat that where the banking institutions are failing in their lending responsibilities, despite the fact that we continue to bail them out on an ongoing basis, credit unions are incapable of responding to members' needs because of the diktat of Mr. Elderfield who does not belong to any community on this island and who does not, I suggest, have the same experience and appreciation of what the credit union movement stands for and what it has meant in the lives of its members throughout the length and breadth of this island.

See this speech in context