Charlie McConalogue (Donegal North East, Fianna Fail) | Oireachtas source

I join my colleagues in supporting this motion put forward by Deputy Michael McGrath. The number of speakers on both sides of the House having to share time and having such a short period of time in which to make their contributions shows the value of credit unions to communities throughout the country. The large turnout in the Visitors Gallery, both last night and tonight, shows the esteem in which the credit unions are held and also is a reflection of the number of people involved in those credit unions and in running them on a day-to-day basis, ensuring that they make a real impact on the local economy. I had the privilege tonight of welcoming a representative from probably the most northern credit unions in the country, Mr. Brian Barr from Foyle Credit Union in Moville. The credit union movement is the same throughout the country.

The motion that has been put forward by Deputy Michael McGrath suggests coherent and sensible approaches that the Government could take to bolster the credit union movement and ensure that it can develop and be strengthened. For example, and just to be clear on what the motion is calling for, it seeks a review of section 35 of the Credit Union Act 1997 relating to restrictions on rescheduled loans and term limits on lending and a streamlining of the process for the approval of additional services. In the past six years, there has not been an additional service approved for even one of the credit unions across the country. It seeks a financial impact analysis to be conducted on the extent of losses incurred by credit unions arising from the Personal Insolvency Act 2012 and that the Central Bank, in its consumer protection role, engage directly with credit unions to establish the impact of the current legislation and regulatory restrictions on communities. It asks the Minister for Finance to bring forward a White Paper on the role of the credit union sector within the broader financial services sector in Ireland. In many other countries, credit unions are clear on the policy field within which they operate and how they can develop but that is not the case here and that must happen. It seeks the establishment of an industry-led forum with representation from all stakeholders in order to examine how credit unions can ensure their future growth across the country. All of these are sensible suggested measures which are very much needed by the credit unions.

At a time when we see bank branches closing throughout the country and, indeed, some banks withdrawing from the country altogether, the credit unions continue to provide 400 branches throughout the country and continue to be rooted in their communities. The credit unions local knowledge and expertise, and those involved in each of them, has ensured that they provided an essential service to their community over the years and that such collective wisdom brought the movement through what was one of the worst banking collapses internationally.

In 2011, the Minister for Finance, Deputy Noonan, stated, "If the movement was one large bank with individual branches, it would have no problems because the good ones would balance the bad ones". If the movement had been a bank, it would not have emerged overall from the financial crisis of the past few years in such a healthy state. The Minister went on to state that his advice at that stage was that it would cost between €500 million and €1 billion to deal with problems in certain credit unions.

It has been established in parliamentary questions put forward by Deputy Michael McGrath that €35 million has been drawn down from the resolution fund by way of expenditure relating to incentives for credit union resolution, Central Bank resolution related expenses and interest expenses. However, alongside that €35 million that has been drawn down from the resolution fund, there has been income from the resolution fund of €29 million, meaning that the net cost of the sector to the Exchequer over the past number of years is €6.5 million. If we could only say the same about other parts of the financial system, we would be in a very healthy position. That is why the measures put forward tonight need to be taken seriously and supported by the Government. The issues, such as caps on savings, restrictions on the type of lending and new business and products that credit unions can develop, need to be addressed and I urge the Government to adopt this motion tonight.

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