Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The figures the Minister outlined highlight that what we have in the credit union movement is a healthy overall sector, but there are a number of credit unions with serious financial difficulties. It is a question of bringing about the restructuring that is required in order that the weaker credit unions can be supported by the stronger credit unions, and to have such consolidation ideally on a voluntary basis. One of the issues to the fore is the lending restrictions that are in place. The Minister's figures underline the point that the loan-to-asset ratio is 32%. The credit unions to which I have spoken have buckets of cash but they are simply not allowed to lend it at present because they are working under very onerous lending restrictions imposed by the regulator under the Central Bank, and that is causing a very real problem, not only for the credit unions - because they cannot put members' savings to work - but for the economy generally, because credit unions have always been the option of choice for many consumers who do not have a relationship with the banks. I am afraid we will lose that connection, which has historically been the bedrock of support for credit unions in communities around the country. In tandem with the restructuring, I would like to see the Central Bank ease off on the very heavy lending restrictions that are currently being imposed.

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