Dara Calleary (Mayo, Fianna Fail) | Oireachtas source

I thank my colleague , Deputy Michael McGrath, for giving us this opportunity to put credit unions front and centre in political debate. They have not been discussed for some time. We should acknowledge their important role in the recovery of the country and, most importantly, in the recovery of trust in the financial sector. No matter how much financial engineering and investment goes on, trust in financial institutions will take a long time to be recovered after recent years. The financial institution model that enjoys the most trust is the local one - the community-owned, community-based organisations that are the hundreds of credit unions the length and breadth of the 32 counties. They have withstood the greatest pressure and the biggest regulation over the last years. As we speak tonight, there are probably tens of people across the country meeting their local boards, making decisions and ambitious plans for the development of their credit unions and communities, yet they are to be handcuffed by regulation.

The regulator is not thinking outside the box in respect of the role credit unions can and will play, if we are to have an economic recovery that is fair and that is spread. As Deputy Browne said, in order for the recovery to be fair, the credit unions need access to those who will not get bank lending. In order for it to be spread, we need to give the credit unions the resources and power to become an essential part of SME lending. In 2012, we established a structure around Microfinance Ireland, which took a long time to get going. Only in the last 12 months, under the direction of a new chief executive, has it begun to make an impact. During that debate, we pointed out that the credit union sector is ideally placed to start a microfinance scheme to SMEs. It knew local business, local business conditions and the potential of businesses. However, the Department of Jobs, Enterprise and Innovation dismissed the idea and said the sector was not suited to that role. Despite that, credit unions came together with their local enterprise boards, in Kilkenny and a number of other places, and put together a scheme of assisted lending and support in partnership with the old enterprise board. The intention was to continue this with the local enterprise office, but that, too, in many cases, was hit on the head by the regulator and the Department.

We have had many discussions with the Minister for Finance and the Minister for Jobs, Enterprise and Innovation about the need for SME finance, particularly for start-up businesses. Here is an organisation that is willing to come up with ideas and products and that has the requisite knowledge and experience of lending, yet it is constrained from doing so because of a lack of willingness on the part of the regulator and the Government. Despite what the Ministers, Deputies Noonan and Bruton, say, it is still a big problem to get funding to start a business, particularly small-scale funding and especially for those not in the business of exports or IT.

In the last years, the credit union sector has trained up its staff as professional financiers with training programmes that are acknowledged independently as some of the best and toughest on the market. They have the professional and local knowledge. Why is the Government not willing to unlock that knowledge and potential and open up an opportunity not just for the credit union movement, but for so many would-be entrepreneurs and employers?

Deputy Twomey will be familiar with the fact that in many rural communities, the abeyance in Leader funding in the past few years has starved many local development organisations of their ability to bring a project to fruition, be it enterprise-related or a community development project. Although Clann Credo, the social financing organisation, does very good work, this is an area in which the credit unions have local knowledge and expertise. Many of those who are on the board of a local credit union are probably also involved with the local community development organisation and have that knowledge.

If we opened up their ability to do that, extended their lending range and gave them the chance to be the local social finance partner, it would open up so much opportunity not just economically but, most importantly, socially for local communities, local sporting organisations and local educational development, and for so many areas that have been starved of resources for so many reasons. However, these resources are sitting in a savings account in the local credit union or in its bank account, looking for investment and for a return on that investment, which would come were it given the opportunity.

There are so many opportunities and so many ways of thinking outside the box, yet what did the Government do? It forced the Irish League of Credit Unions to go to court to try to define what it was doing and what its relationship was with the regulator. That is not as it should be. This is an organisation that, for many decades, has been at the forefront of community development. We should not be dragging and forcing it to go to court to assert its rights and assert its identity. People like John Hume did not get involved in the credit union movement to see it go that way; they got involved in the credit union to keep it true to its community and to community development. That is what it wants to do.

While there are a few bad eggs, we do not see credit unions closing down local branches wholesale or withdrawing local services at a day's notice. We do not see them telling businesses or anybody else on what days they can lodge money and on what days they cannot, or how they can lodge the money or how they cannot. We do not see them upping their fees for doing business by 200% or 300% at the behest of shareholders who do not even live in or do business in the country. That is not the ethos. This is an organisation that is willing to do business but one that has been strangled by regulation for the sake of regulation, as Deputy Ó Cuív said. It has been strangled by a system that does not understand or, frankly, does not seem to want to understand the ethos. It does not understand why local people get around a table every month to run their credit union and develop their community, why they give up their time for free to do that or why they travel across the country to board meetings and conferences. They do this so their credit union can grow, so they can drive forward and so they can be ambitious for their community, yet we have a system that is trying to choke that ambition and drive, and nobody in government seems to want to do anything about it.

This morning's announcement is typical. This motion was tabled by Deputy Michael McGrath and, suddenly, we get an announcement with no detail and with no timescale for roll-out. The credit unions will be allowed to make available small-scale, regulated payday loans, and I am sure we will tie on the post offices as well to keep them happy. The Minister has had four years to develop a strategy to actually push the credit unions in terms of what they want to bring to the table and to challenge that perception, yet he has failed. So much attention has been given to rebuilding the financial system, yet we have left this very important element out of the discussion. The credit unions have been dismissed by the Department of Jobs, Enterprise and Innovation as not having SME experience even though each and every credit union is an SME in its own right. They are small businesses in their own right; they understand what it is like to open the door on a Monday morning and try to get through the week. They understand that pressure, and the people around the table as directors understand it more than anyone else. If we had had a little more of that understanding in our big banks in the past few years, we might not be in half the mess we are in.

The Minister has an opportunity. There is a ball there and what is needed is somebody to take that ball and run with it. This could open up so much opportunity not just for the movement but for communities, for small business, for ambition and for dreams throughout the country. This will result in employment growth, which will result in financial stability growth, which will ensure there are financial services in the many parts of the country that big business and big banks have given up on. We can depend on the credit union as a local organisation to stand by its community, even though our Government may not be willing to stand by the credit unions.

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