Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The discussions that have taken place on this motion on the report on the review of the credit union sector are timely and I very much welcome them. On behalf of the Minister for Finance, I thank the House for the opportunity to engage in this debate.

The Government welcomes the report and the significant work undertaken by the committee in its review and acknowledges that both the committee's report and the CUAC report are important contributions to debate on the credit union sector. I reiterate that much of what the committee recommends is already under way in respect of the work of CUAC, the CUAC report implementation group, the Central Bank and the Department of Finance to date in progressing the recommendations contained in the CUAC report. The Government supports the invaluable role of credit unions in Ireland, managing, as they do, almost €17 billion in assets and providing €2.4 billion of new lending, primarily consumer lending, in the year to September 2017. As I set out earlier, the credit union sector has undergone fundamental change since 2011, when the Commission on Credit Unions was established, managing many complex and difficult issues, including elevated arrears, reducing lending, an ageing membership base, low investment returns and a more intrusive regulatory environment.

Looking back on the 2011 position of credit unions, it is clear that the sector overall has managed to come through the financial crisis much stronger than expected, and we recognise this. Credit unions have gone through a restructuring programme overseen and facilitated by a time-bound statutory body, ReBo. The latter was established to facilitate and oversee the restructuring of credit unions on a voluntary, incentivised and time-bound basis. The objectives of the restructuring process were to underpin the stability and long-term viability of the credit unions and the sector at large and to provide an opportunity for stronger credit unions to develop a more sustainable business model. The Government provided €250 million in the credit union fund as a source of financial support for credit unions restructuring under ReBo. While it was envisaged that significant funding would be required for credit union restructuring, it is commendable that the credit union movement has provided funding from its own resources, thus minimising the requirement for drawing on Exchequer funding. During ReBo's lifetime, 82 restructuring projects involving 156 credit unions with total assets in excess of €6 billion have been completed. While ReBo completed a performance of its functions in March 2017, it is worth noting that restructuring continues, facilitated by the Central Bank, albeit at a reduced rate.

Credit unions are local, community, not-for-profit financial institutions that are built on the trust of their members. They have a national reach. As such, the Government recognises that credit unions have played and continue to play a crucial and prominent role in meeting the financial, economic and social needs of our communities. The Minister for Finance will continue to play a constructive role supporting credit unions in continuing to progress, develop and find ways of doing business to better serve their members. While credit unions have shown a willingness to embrace change while staying true to their core values, the safety of members' savings and the security of the credit union sector as a whole remain priorities for this Government. The Government will continue to work proactively with all stakeholders, particularly through the well-established CUAC.

The committee report will, along with the CUAC report, make a positive contribution to reforms already under way in the credit union sector.

I welcome the report. I met the Irish League of Credit Unions this afternoon before the debate. I have always been a huge supporter of the credit union, going back to when I was a teenager when I drew down loans from Gorey Credit Union when I started in business myself. I can only speak about the credit union I know best, which is Gorey Credit Union, and during that era in a different recession in different decades it provided multiple loans for businesses of every hue. There was no difference if someone was in retail, farming or any other business.

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