Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The Minister will have to go beyond not being against it and instead proactively assist credit unions to become involved in the mortgage market. The business model of credit unions is under very significant pressure. They have very poor investment returns and their loan to asset ratio is in the region of 27%. They are feeling the burden of regulation quite severely.

The CUAC report acknowledged that one of the key recommendations of the commission on credit unions for tiered regulation has not been implemented.

There is a one size fits all approach to the regulation of the credit union sector which, in my view, is fundamentally inappropriate. I am glad that the Minister has finally moved to set up an implementation group to deal with the recommendations from the credit union advisory committee report. However, when it comes to mortgages, there will have to be a change in policy. Otherwise they will not be able to get into that market in a significant way. There is a number of large progressive credit unions that have dipped their toes in the mortgage market and it has worked well for them, but all it would take for them to go beyond their 10% or 15% limit is a very small number of mortgages. I hope the Minister takes an interest in the issue because we need to ensure that the business model of credit unions is developed and that there is a genuine strategy for the support and development of the sector which is not just focused on regulation.

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