Bobby Aylward (Carlow-Kilkenny, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak on behalf of credit unions, which are a trusted financial provider at the heart of many communities in this country. The recent flood of communications we have all received from members of credit unions are a very stark reflection of the great concern that currently exists. This concern surrounds the consultation paper issued by the Central Bank in November 2014, better known as CP88. It is a very pressing regulatory issue which will significantly impact on the capacity of credit unions to thrive and develop.

I listened intently to the debate yesterday, as the Minister of State, Deputy Harris, twice referred to the perceived impact of the regulatory changes contained in CP88. Dismissing the concerns of so many people involved in the credit union movement in the manner in which he did is grossly inappropriate and downright arrogant. The reason that so many letters and e-mails have flooded into the postboxes and in-boxes of Deputies of the House is not because of the perceived impact but because credit unions and their members are well aware of the true impact of CP88.

The proposal to impose a cap of €100,000 on the savings that an individual member can hold in a credit union has the potential to damage confidence severely in the sector. Credit unions are currently required to maintain a regulatory reserve ratio of not less than 10% of total assets. This crude and blunt instrument does not take account of the risks faced by the sector. A risk-weighted system, matching capital or reserve to risk, is more appropriate for the modern and progressive credit union movement.

A desire to use surplus funds for broader social based and community needs has often been expressed by credit unions. The CP88 investment regulation allows little or no breathing space for the placement or management of such funding. The rules should also allow for centralised investment for home loans, social housing and SMEs. Regulations must afford credit unions the opportunity to benefit from central investment vehicles which would improve returns and allow them to become more involved in important social projects.

It is only right that a comprehensive review is conducted on how the commission's recommendations are being implemented, and whether the legislation and regulations reflect the current needs of the 3 million credit union members. The Minister must take additional time to ensure that the knock-on effect of such regulations do not have a negative impact on the members, volunteers and staff which make up the backbone of this valuable movement. A working group, involving representatives of the industry, should immediately be initiated to examine the regulatory structure. No further red tape should be imposed on credit unions until such time as this happens. I call on the Minister to refrain from commencing CP88 while considering the recommendations made before him in this House and the Irish League of Credit Unions' six strategic steps in its vision for the future.

If properly regulated, credit unions can deliver much more for members and local communities in areas such as housing, small business and credit union facilities for the most vulnerable. Before this request is dismissed, I ask the Government to heed a message very strongly. Whatever myth exists in its mind that the credit union movement has been engaged with, listened to and properly consulted needs to be completely dispelled. The continuation of this course of regulation will ensure that the movement will wither into irrelevance and pass into history as the great movement that came and went on the island of Ireland. Is that the enduring legacy that the Minister, as a legislator, wants to come to pass for coming generations? These are the words of Mr. Brian McCrory, president of the Irish League of Credit Unions and secretary of the World Council of Credit Unions. The message was dispatched to the in-box of every Deputy earlier today and I, like every other speaker, ask the Government to step back and listen to our proposals.

Small savers and those who want small loans have benefitted from credit unions over the years and we do not want to destroy the movement; rather, we want to maintain it. It fulfils an important role which the banks currently do not, and the Government should listen to this side of the House and give us support.

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