Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak in this debate, which has an impact on the 3 million members of credit unions throughout the country and the various credit unions that exist, providing a long-established service. I thank my colleague, Deputy Michael McGrath, for his work with the credit unions in bringing about this fair, reasonable and balanced motion. It must be recognised that we have concerns regarding the overburdening of credit unions with limitations that are disproportionate to the nature and amount of lending, and the stifling of the growth potential of credit unions.

The debate has become a little simplistic. Some people are trying to say others want no regulation. This could not be further from the truth and it is unhelpful to credit unions for someone to make those statements in this House. Deputy Rabbitte was right when he referred to the unique ethos of credit unions. I would have thought most people in this House would share that view. However, there are people here tonight who may be misguided but who are operating in a divisive manner by trying to suggest some people here speaking on behalf of the credit unions are saying there should be no regulation at all. We are saying it should be proportionate, balanced and fair and that it is disproportionate at the moment.

There are a few points we want to highlight. Section 35 of the Credit Union Act restricts the percentage of the credit union loan book that can extend beyond a ten-year term. This has a serious impact on their ability to issue meaningful loans and it impacts on their ability to issue longer term loans. Another issue mentioned in our motion is the Personal Insolvency Act 2012, which has also had a disproportionate and negative impact on credit unions vis-à-visother financial institutions. The credit unions highlighted this before this ever came into legislation and they have been proven right in some cases. We are calling for investment in infrastructure in the sector to facilitate the growth and development of products and services offered by credit unions and to review the process of approval of additional services, which are needed. We ask that the Central Bank engage in meaningful discussions with the credit union movement to facilitate this.

More than anything, I am impressed by the documents produced by the credit union movement itself. It succinctly outlines a clear business plan for the future. If we had all night to debate the issue, we could do so. Some of the key points from the submission it is making to the people and to the Government need to be reiterated here. The credit union movement is visionary and voluntary. That must be accepted. It vision is being restricted by overly burdensome regulation. It provides credit for the most vulnerable in society. Deputy Rabbitte has spoken about people who cannot get a credit rating and who have been helped by credit unions. They have asked to reduce or remove the red tape on the small loans they can offer. They have also asked for transparency and for greater regulation by the Oireachtas and more engagement with the Registry of Credit Unions. That is something that people should recognise and which we fully support.

I have already said that the issue of the lending restrictions is key. There should be a focus on a member's ability to repay a loan and essential criteria should be considered when making these loans. Deputy Rabbitte - I have now mentioned him three times - acknowledged that the people who cannot get the credit rating are the people we should be talking about. In addition, the limits on lending, in some cases €10,000 or up to €25,000 in exceptional cases, mean that credit unions cannot meet the requirements of their own members and their own customers. That is the essential problem.

There is funding available. Credit unions can be prudent and careful in what they are doing but they are not allowed, by regulation, to meet the requirements of their own members and customers. That cannot be a good thing because ultimately, the customers are being forced to go somewhere else and in some cases they are being forced to go to moneylenders, which is not a good position to be in. One of the most important things for a credit union is to be allowed to develop funding to support small and medium-sized industries. They have funding available of up to €6 billion or €8 billion - a national treasure - which is not being utilised. It should be allowed. In particular, they want to develop their own products to meet these areas.

The credit unions want to help us all with the housing crisis. They have the funding available. They want to help with an urgent social housing programme, to invest in the funds and to have them available. People talk about availability of funds. They are there. Please let the credit unions help and do not put any further restrictions in their way.

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