Jack Chambers (Dublin West, Fianna Fail) | Oireachtas source

I thank Deputy Griffin and appreciate his kind words. I commend him on his time as Minister of State at the Department of Transport, Tourism and Sport. I remember him in one of my own local schools. He really lived up to the title around promoting physical exercise and has left a strong legacy in that Department. I think him for his time and acknowledge his role there in the last number of years.

The Minister for Finance, Deputy Donohue, wishes to inform the Deputy that both he and his officials have engaged extensively with the credit union representative bodies in recent months. Both I and the Minister for Finance are hoping to meet with the credit union representative bodies again next week. As the Deputy will be aware, one of my specific responsibilities as Minister of State relates to the credit union movement and it will bring an additional focus to this area. We must have significant and extensive engagement in the coming weeks so that we take the recommendations of reports the Deputy has referenced, and others, and expand the role of the credit unions across our communities.

The Government recognises the key role credit unions play in the delivery of financial services in local communities, the need for which is heightened at this time. Credit unions account for approximately one third of the consumer credit market and are well positioned to provide credit to support the recovery. However, it is recognised that credit unions have challenges, with a low and falling return on assets arising from the low sector loan-to-asset ratio whereby only 28 per cent of assets are lent out, from low-negative interest rates on over €12 billion of investments, and a high cost to income ratio.

Deputy Griffin mention as well meeting the Kerry and West Limerick Credit Union movement. I am happy to engage directly with the credit union movement in the Deputy's own area over the period. It is important not only to meet the national bodies but actually to engage with the local ones. I am stating at the outset that I am happy to meet with people in the Deputy's own area on this.

The economic outlook arising by virtue of Covid-19, including reduced demand for new lending and rising household savings over the past few months, has exacerbated the challenges the sector was already facing. As a result, it was agreed that the credit union advisory committee would report to the Minister for Finance on challenges and opportunities for the sector, incorporating implications of Covid-19 and any relevant recommendations. This report is actually complete and will be submitted to me and the Minister for Finance shortly. I am hopeful we can take the challenges in the current sector and try to get new opportunities in the context of the stimulus and investment we will see in our economy in the coming period. The credit union movement will have a strong role to play in that.

There are several commitments in the programme for Government which relate to credit unions, including a review of the policy framework, which will be expanded in the coming weeks and months as the new Government beds down, taking into account work already completed such as the credit union advisory committee report noted earlier. We will also take into consideration the views of key stakeholders. Credit unions have a role to play themselves. Credit unions have the ability to improve their loan-to-asset ratio, including through additional consumer lending, mortgage and SME lending, either individually or through collaborative efforts.

Following a public consultation, the Central Bank issued revised lending regulations for credit unions which came into effect this year. Under these regulations, the sector has capacity to lend an additional €1.1 billion for mortgage and SME lending collectively on top of approximately €300 million already lent at the end of 2019. Further additional lending capacity could be available to credit unions which can comply with certain conditions or on approval by the Central Bank.

As part of the Government's Covid-19 supports, a revised credit guarantee scheme, CGS, was announced this morning. This scheme is a Department of Business, Enterprise and Innovation scheme, operated by the SBCI, and is already available for banks, non-banks and, it is important to note, credit unions to participate in, subject to certain conditions. Officials are available to discuss the CGS with banks, non-banks and credit unions. In this regard I have been advised that some credit union stakeholders have held exploratory discussions with the SBCI in recent months. We will also work with credit unions to support the programme for Government with regard to retrofitting. I know from my previous role as climate action spokesperson that they will play an important role to embed their community pillar, as the Deputy has referenced, on that ethos with the entire transition we will see. That is a positive future for the credit unions. I will address some of the other questions the Deputy has in my other contribution.

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