Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

Across the Republic of Ireland there are 2.89 million members in 352 credit unions. Credit union members have in excess of €11 billion in savings, €3.5 billion in loans and more than €13 billion in total assets. Credit unions are not only a major economic force, they are a social movement throughout this country. The Labour Party has always been clear about its role: economic recovery is for a social purpose. Credit unions have an ambitious developmental agenda. They want to better serve their members and their communities. They are hamstrung and frustrated by what they cannot do, but they have a positive developmental agenda to do much more.

Like Deputies on all sides of the House, I have been lobbied by the Irish League of Credit Unions. Areas I have identified where credit unions could do much more include micro-credit, lending small amounts to the most vulnerable, who are pushed into the maw of moneylenders; making significant amounts of money available to finance social housing from the €8 billion currently held in investments; and lending to small and micro-businesses. These are not just platitudes from the credit unions. They delivered a cogent, well thought-out policy platform in their Six Strategic Steps policy document, which has been backed up with a detailed policy document on how credit union resources could effectively support delivery of social housing. The Ministers, Deputies Alan Kelly and Paudie Coffey, have that proposal on their desk and it has now also been sent to the Minister for Finance. This is not rhetoric. They have fleshed out in great detail this worthwhile proposal. The Irish League of Credit Unions proposes that its credit unions would form a special purpose vehicle, which would either invest in a State-owned financial vehicle that would lend to approved housing bodies to fund the development of social housing or would lend directly to approved housing bodies to fund the development of social housing. Credit unions have also delivered pilot schemes for micro-credit programmes led by the Tánaiste and Minister of State, Deputy Humphreys, in the Department of Social Protection. I hope this will be available throughout the countryside soon.

Credit unions are stepping up to the plate with ideas and enthusiasm. Where they can find willing partners, they are participating enthusiastically. If credit unions are determined and ambitious, they are also hamstrung by inappropriate, one-size-fits-all regulation. CP88 is an acronym that will not mean much to most people, but it is the latest in a long line of inappropriate, one-size-fits-all regulation that is preventing credit unions from delivering what is being demanded. Loan-to-asset levels have fallen movement-wide from 44% in 2010 to 27% in 2015. During this period, the movement has maintained its members' savings. As a result, significant levels of members' funds are held in investment-related products earning a low or negative yield, such as Government bonds, or put to unproductive purposes. This also exposes significant levels of members' funds to market risk, as income levels are under increased margin pressure due to a prolonged low interest rate environment. Currently there is over €8 billion in credit union accounts. The extraordinary consequence of the regulation of credit unions is they are, first, being severely hampered in their capacity to lend money for viable prudent purposes. Second, the Central Bank and the Registry of Credit Unions are regulating credit unions so as to ensure that local branches close, leaving communities in the lurch. Credit unions stay open to serve the communities that founded them. The same credit unions are at that stage being forced by the same regulator to put the credit union members' savings, which they are prevented from lending, into the banks-----

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