Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

I welcome the opportunity to speak. In Ireland, 342 credit unions are affiliated to the Irish League of Credit Unions. Between them, they have almost 2.9 million members, over €11 billion in savings, almost €3.5 billion in loans and €13 billion in total assets. These figures show that the credit union movement is a major economic force in Ireland. Over the past number of weeks, I have spoken with a number of credit union managers about their concerns regarding certain aspects of the proposed CP88 regulations. There is a realisation that proper regulation is needed. We all know what happened in the banking sector. As a result of little or no regulation by the previous Fianna Fáil-led Government, there was a disaster for each and every one of us. It caused enormous damage to the country. This must not be allowed to happen again. The Government has a clear policy of supporting the sustainable growth and development of credit unions in Ireland as set out in the report and recommendations of the Commission on Credit Unions. The safety of each and every member's savings and the security of the credit union sector as a whole are an absolute priority for the Government and will not be put in danger as a result of light-touch regulation. The Government is putting in place a number of measures to ensure that credit unions can continue to provide the many vital services to members and to ensure the stability of the sector into the future. These measures have included the establishment of a commission of credit unions, the publication of Credit Union and Co-operation with Overseas Regulators Act 2012 and the establishment of the credit union reconstruction board, ReBo.

It has been argued that the imposition of the €100,000 cap for members' savings will cause great difficulty for credit unions and cause them to be seen as the poor relation of the banking sector. While I have some concerns in this regard, it is important to look at the real facts. The Minister for Finance has been informed by the Central Bank that the need for credit unions to take large savings from individual members has not been demonstrated under the current credit union business model to date. The average savings held by individual members is just over €3,700. The Minister has been informed that approximately 54% of credit unions currently hold individual member savings in excess of €100,000. However, the total amount of savings in excess of €100,000 in the credit union sector is approximately 1.3% of total member savings. Less than 0.12% of all credit union members have savings in excess of €100,000. As such, more than 99% of credit union members will not be impacted by this measure. The introduction of a maximum individual member savings limit of €100,000 will ensure the protection of members' savings and continue to ensure that credit union funding is significantly diversified and not dependent on a small number of members. We cannot allow a situation to develop whereby the viability of credit unions is dependent on the savings of a small number of members.

I recognise the very important role of credit unions as a volunteer co-operative movement in the State. The Government's priority has always been the protection of credit union members' savings and the financial stability of credit unions. The Government is determined to continue to support a strengthened and growing credit union movement into the future. I am a member of the Dundalk Credit Union as are all my family. We appreciate the good work it has done over the past number of years.

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