Michelle Mulherin (Mayo, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on this motion. Apart from some imprudent lending by a very small number of credit unions, credit unions do a magnificent job. There is a mighty group of volunteers throughout the country who ensure credit unions offer a vital service to so many people by way of lending. There are many credit unions in my county doing fantastic work. There are credit unions in Ballina, Castlebar, Westport, Swinford, Balla, Kiltimagh, Louisburg and Ballinrobe. I commend all the people involved.

From speaking to some members and staff involved in running the credit unions, I have learned that this has become a more scary time to be volunteering in a credit union because of regulation, scrutiny and a new dynamic within the banks. It has been explained to me that a traditional domain of the credit unions was giving out student loans, small loans of €1,000 or €1,500 that might be repaid within a year or year and a half. Now the banks are vying for this business. This is a little ironic considering the difficulties we have with banks lending to businesses. We want the banks to lend to businesses to get the economy moving and to have investment in growth, yet they seem to be targeting what was traditionally credit union business. The banks are depersonalising the relationship with the ordinary citizen by not wanting to accept cash valued below a certain amount. "Talk to the machine" is basically the philosophy of the banks. This is in stark contrast with the very human experience one has when one enters a credit union.

From speaking to people in credit unions, one could not but have many reservations about regulation CP88, lending restrictions, too much red tape and activity people fear will constrain their ability to develop more business. I would like to believe there will be ongoing dialogue on this because it is in all our interest that the credit unions become the success we need them to be. I acknowledge and totally understand that the motivation of the Minister and all concerned is to protect people's savings and ensure the viability of the credit unions. However, we must get the balance right. Deputy Heydon referred to this.

I very much welcome some of the good initiatives that are emerging and ongoing. One is the personal micro-credit initiative, which will mean people receiving social welfare payments will not have to go to moneylenders. One should also consider the initial discussions on post offices and shared services. We should bear in mind the examination of the idea of credit unions assisting with the provision of social housing. Credit unions are not precluded from mortgage lending but the manner in which the rules are constructed at present is surely an impediment. These issues need to be teased out further until we get the right balance.

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