Thomas Pringle (Donegal, Independent) | Oireachtas source

With announcements in recent weeks about Ulster Bank withdrawing from Ireland and Bank of Ireland closing branches, there is an opportunity for the thriving credit union and post office networks. In Donegal, Ulster Bank is closing five branches and Bank of Ireland is pulling out of another five towns. I have talked to a number of local credit unions across Donegal and they are seeing an increase in people moving their deposits to those credit unions. However, credit unions are hamstrung by regulations on deposits, which sees them limiting deposits because they are forced by Government policy to make a loss in the context of holding people’s money. This was to shore up the balance sheets of banks during the crash and now continues to facilitate the banks to the detriment of credit unions. It is as if the Government has something against people exercising control over their own decision-making, especially when it benefits communities directly. Credit unions need to be able to lend out to communities the money they take in. That is how it works.

Since the enactment of the Credit Union Act 2012, credit unions' cost base has risen dramatically from less than 20% of their total income then to more than 80% now in some cases. There are also reports of increasing and ongoing pressure from the Central Bank to add even more regulatory compliance staff and costs. These costs are unsustainable and will put many local credit unions out of business.

Staff of the Central Bank are not accountable to any body or agency for their actions. I am told that credit unions need legislation appropriate to their members' changing needs. Currently, all responsibility lies with credit union directors and CEOs to develop and deliver services to members, and rightly so. However, the Central Bank then has the authority to block, frustrate or veto any such services or initiatives. I am told that, in effect, credit unions have been given the responsibility to deliver those services with zero authority to do so. The feeling in some credit unions is that the Central Bank favours banks and that it is intent on building up the profits of the banks while embedding regulatory costs which reduce the surplus of credit unions. Apparently, the Central Bank has indicated that every credit union should expect that members will not be paid a dividend or interest rebate for the year 2020. There has been a reported exodus of experienced volunteers from credit union boards because of what is deemed to be relentless, restrictive and excessive governance regulation by the Central Bank. It is feared that if such micromanagement continues many small-medium sized credit unions will be lost in the next few years.

I have also recently highlighted the stark housing problems in Donegal. Credit unions have been offering a viable solution for investment in social housing for years but a decision from the Department is still outstanding. It is not as if there is any urgency in addressing the housing crisis, I suppose.

Bank of Ireland has organised anexclusive contract with An Post. However, credit unions are not allowed to explore the possibilities in this regard. Will the Taoiseach now expand the remit and autonomy of credit unions?Credit unions are member-owned and have been the lifeline of a large number of communities over many years. Why would he allow the Central Bank to squeeze some credit unions out of some localities? What will he do to stop that?

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