Martin Heydon (Kildare South, Fine Gael) | Oireachtas source

I would like to speak in favour of the credit union movement and the great work it does. It has 3 million members, nearly 400 offices, employs 4,000 people and 10,000 volunteers. The statistics speak for themselves. It is a movement that was established for the people, by the people. The founders of the credit union movement in the 1950s recognised the major difficulties and lack of confidence caused by mismanagement and a lack of money. They resolved to identify a system that would allow people to gain more control over their finances. Now, almost 60 years on, the same principles apply. There still remains a major need for credit unions in this country and that is why Government policy, which is to support the strategic growth and development of credit unions in Ireland, as set out in the recommendations in the report of the commission on credit unions, is so important.

I welcome the League of Credit Unions document, Six Strategic Steps Towards 2016, and look forward to working with the sector to address its concerns and realise its goals. Just as important as protecting the credit unions is the need to protect members' interests, that is, members who trust the credit union movement with their savings. I speak from bitter experience, as many of my constituents in Newbridge endured a few horrendous years with the loss of a credit union.

I remind the House of some of the issues that emerged from the lending practices there. Some €2.8 million of an individual loan of €3.2 million, which was well in excess of the Credit Union Act restriction, remained outstanding at the time of transfer to PTSB. Over 51% of loans exceeded the five year duration, as opposed to the maximum of 20% set out in the Act. Some 18.5% of loans exceeded ten years, compared to the maximum of 10% permitted. The average loan size in Newbridge Credit Union was €17,281, compared to an average credit union loan of €7,764. There were 26 loans with an average value of €550,000 which were seriously distressed. These figures illustrate that the credit union was operating in a very different way to a normal credit union. It was the exception, rather than the rule, but the bitter experience we had proves that we need regulation.

Fianna Fáil's motion is a bit rich. It accuses those of us in government of not protecting the credit union movement when it was its period of light touch regulation that inflicted the damage on Newbridge and put members' money at risk. It was this Government that stepped in and protected every last cent of the savings of members of Newbridge Credit Union. It was this Government which introduced changes which will ensure that what happened in Newbridge can never happen again.

Some €250 million is available for the voluntary restructuring of credit unions facilitated by ReBo, some €250 million has been made available for resolution purposes and, to date, resources from the credit institutions resolution fund have been utilised to fund the resolution of four credit unions. Like our extensive post office network, our credit unions are a fantastic resource and have an important role to play in providing the necessary small loans that people cannot always access elsewhere. I welcome the announcement this week and look forward to working with the credit union movement to ensure the lending and role it plays in communities continue

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