Tom Fleming (Kerry South, Independent) | Oireachtas source

Families, small businesses and people of modest means could not function without the credit unions. The CP88 regulation, to be signed into law as part of the Central Bank regulations by the Minister for Finance, Deputy Noonan, by 31 December, as currently proposed, is much too restrictive. If this is not deferred and deliberated on with more thought, it will cement the restrictions and it will be up to five years before they can be reviewed, thus strangulating the huge potential of the financial, social and economic role credit unions can deliver on. Of most concern in the regulations is the carry-over of lending restrictions from 1997 which only allow for 10% of credit union loans to have a term of more than ten years. This totally restricts any customer-friendly move into larger loans for houses, etc. It also prevents customers from saving more than €100,000 with their local credit union, which is a most regressive measure. The Irish League of Credit Unions has commissioned a report to review the current structure of its organisations and the potential for change. Under a new structure, similar to that of co-operative banks across Europe, there would be more co-operation and standardisation among the ILCU's 300 credit unions, with loan decisions potentially being centralised.

As regards capital requirements, credit unions would need to have €1.3 billion in excess capital to transition to this structure but it actually exceeds that at the moment with up to €2 billion in excess capital credit. This shows the potential credit unions have and we ask for the Government's co-operation on this.

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