Michael Kitt (Galway East, Fianna Fail) | Oireachtas source

I commend Deputy Michael McGrath on the comprehensive motion which he tabled and addressed yesterday. I agree with him on the need for a clear policy to support the strategic growth and development of credit unions in Ireland. It is certainly the case the main focus of the credit union movement is the community. I have always made the case that credit unions and the group water scheme movement are two organisations which have been a great addition to rural Ireland particularly. One only has to look at how credit unions have helped out, particularly in education because of the expense of third level education and back to school expenses, and other issues such as Christmas bills and loans for house improvements. These are very necessary expenses, particularly for people who are vulnerable. The credit union movement keeps vulnerable people away from loan sharks, which is something about which we should all be concerned.

Credit unions have kept credit flowing throughout the economy and have kept businesses going and people at work. It is interesting to note credit unions are available in more and more smaller towns. This is happening at a time when banks and post offices in rural areas are closing or moving out. It is very encouraging to see the credit union movement has grown. I saw figures which indicated that in the past two years membership has grown by 70,000 and the total membership is approximately 3 million members. The Irish League of Credit Unions as the representative body has approximately 455 credit unions on the island.

The sector can keep going only if it is able to issue more loans. We must address this. This issue has been raised by Members on this side of the House, particularly with regard to lending, new products and the cap on savings. I hope the Minister will review the legislation on restrictions of loans and term limits on lending. In particular, as has been pointed out in this debate, the Minister needs to bring forward a White Paper on the role of credit unions in the broader financial services sector in Ireland. There is certainly a need for a review of the process to approve additional services. I hope these will examine regulation, lending restrictions and electronic services, helping small businesses in particular and the role credit unions can play in the housing crisis.

They have a role and it is important to realise that the bank is not the only place to get a housing loan, even if it just relates to house improvements.

Many comparisons are being made between the credit union movement and post offices and both are based in the community. However, there have been suggestions of mergers between post offices and credit unions as an alternative to mainstream banking. I do not know where the proposal from An Post and the six Limerick credit unions on co-operation and a pilot project is but we have heard these suggestions before. Some post offices have been successful in getting new business but restrictions and obstacles have been put before credit unions. I hope the proposals for lifting lending restrictions that credit union personnel discussed at the Irish League of Credit Unions annual general meeting some months ago could feature in the Government's thinking.

Small business is often discussed by credit union personnel and when such small businesses need help or other assistance, the credit union movement is the one to provide it. I hope any changes will be embraced by the credit union movement if they can be done without changing the ethos and core values of the movement. It will always be about community, helping families and keeping many people in work. The credit union movement employs 4,000 people and has almost 10,000 volunteers, which means there is great community involvement. It is interesting to note that credit unions survived the crisis well, with just 1% of credit unions requiring State funding since the financial crisis began. The function and role are laid out by the credit union movement at a national policy level in other countries and that should be done here as well. It is interesting that the credit union movement has supported so many elements in communities and I mention, in particular, agricultural shows which have often found it hard to get funding.

See this speech in context