Derek Nolan (Galway West, Labour) | Oireachtas source

I am delighted to have the opportunity to speak on this Private Members’ motion, and I thank Fianna Fáil for bringing this important topic to the floor of the House tonight.

The credit unions are so familiar to people that they are almost like a member of the family. One goes to see the credit union as often as one goes to see one’s uncle. There is a warm personal relationship. Credit unions get to know who people are in the community and understand their trustworthiness and credit risk. When we talk about the credit union, we should be careful to differentiate it from the banks and other financial institutions. While credit unions deal in money, they are often the buffer when the banks will not lend and the other option is a moneylender or someone more grievous. The vital social role that credit unions play needs to be protected and enhanced.

The credit union sector faced its greatest possible threat in recent years, with the possibility of some of them going under. The risk of reputational damage that could have affected the entire sector if one or two credit unions got into trouble was very stark. Over the past several years, financial security and certainty were a concern for people. Any hint of instability could have damaged the sector. It is a credit to the sector that it has managed to pull itself through difficult reforms and still have community support and its reputation intact while maintaining its exceptional services.

After so much change and adjustment, we need to review how we can best support credit unions. In Galway, I am familiar with several credit unions, such as Naomh Padraig and St. Anthony's & Claddagh. St. Columba’s credit union, based in the east of the city, offers an innovative model for where the credit union movement can go. Having established a subsidiary company called St. Columba’s Credit Union Limited, it has set up an enterprise centre which supports business incubation and mentoring, as well as funding voluntary organisations involved in social work and social care. This is all achieved through the resources and financial assets that come from its members’ savings. This represents a whole new model for credit unions with regard to what they can do with their members’ money. Credit unions do not seek profit but serve their communities, an ethos on which they were founded originally by their voluntary members and which keeps them so grounded in their communities today.

The pioneering work done by Liam Bluett and Michael Smith in the centre and its reputation in the community, and bringing this back to its own credit union and building up such a strong brand, is very powerful.

I understand we have the credit union advisory committee, but just because we have a regulator and regulations in place it does not mean things are soft. All of these matters need to be kept under constant review to ensure we do not attempt to regulate credit unions into being banks and we do not turn them into places with no flexibility which are completely cold and guideline driven. We must also keep under review the ability of the State to produce an environment in which credit unions can go outside their traditional role and use their pioneering methods, but at the same time never forgetting their incredibly important role of being there when people are in trouble and need a few bob, such as when the car breaks down and there is no money to repair it or when there is an emergency for the kids. It is a lender of resort people can trust which has the flexibility and ability to meet this need in an environment based on the community and the ethos it serves.

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