Joan Collins (Dublin South Central, Independent) | Oireachtas source

I received an email from the Irish League of Credit Unions about the industry funding levy on credit unions. I had also seen that in the newspapers. On 14 June, the Central Bank announced plans to increase the industry funding levy on credit unions from approximately €1.5 million per annum to approximately €7.8 million by the end of 2022.

This increase was approved by the Minister for Finance and Public Expenditure and Reform, Deputy Donohoe. The Irish League of Credit Unions has sought clarification from the Minister on whether he consulted the Credit Union Advisory Committee, the statutory body established to advise the Minister on credit unions, in advance of the announcement. I want the Minister of State to answer that question.

The Irish League of Credit Unions is deeply disappointed that despite his stated support of credit unions, the Minister has brought in an exclusively monetary analysis of the co-operative credit union movement. It places little value on its social capital, volunteers, community base or democratic structure, all of which deliver a very positive social benefit to Irish society at zero cost to the Exchequer. The Irish League of Credit Unions wrote to the Minister about the matter in April and it is regrettable that he chose not to engage with it. Why did he not engage with it on this issue?

The Central Bank conducted a public consultation process on increasing industry funding levels in 2012, but it did not take on board a submission made by the Irish League of Credit Unions, in which it indicated that credit unions were different and that their societal impact should be taken into account when calculating the industry funding levy. Credit unions are not-for-profit, community-based and volunteer-led. The misguided equating of credit unions with banks and a hike in the levy by a projected €6.3 million underline the cultural misfit between the credit union movement and the Central Bank. It is a further shift in the wrong direction. Credit unions are a social force operating in this country on a not-for-profit basis. The Charities Regulator is fully funded by the Government and society at large supports the regulatory cost because of the enormous social capital it oversees. The reason is simple and rational; it is a reciprocal co-investment for the time given and commitment made by so many people who are contributing to the country's social capital and cohesion.

The Irish League of Credit Unions made an analysis of how much credit unions, ranging from the very large to the small, would have to pay towards the levy. The very large credit unions would pay €143,000 by 2021, while the smaller credit unions would pay €7,271. This increase is unfair and the levy should not apply to social capital. It is a levy on volunteers and a further drain on already squeezed credit unions when their loan-to-asset ratio is historically low and returns on investment have tanked. The increasing equating of credit unions with banks by the Central Bank, with the approval of the Minister for Finance and Public Expenditure and Reform, is a fundamental problem of attitude and understanding. I ask the Minister of State, in the strongest terms and on behalf of the Irish League of Credit Unions, to address this matter. Nearly every Deputy would have received this email from credit unions and we are asking for the reversal of what is a wrong and damaging policy.

The Irish League of Credit Unions has 3.6 million members, of which I am one. I am disgusted that the levy is being applied to credit unions. In Ireland RepTrak, the reputations agency study, credit unions came out top with regard to respect, trust and esteem among the public. Are we to put a levy on credit unions and treat them like a private bank? I ask that the application of the levy be withdrawn.

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