Marian Harkin (Sligo-Leitrim, Independent) | Oireachtas source

I will concentrate on just one aspect of the future of banking: the role of credit unions. I acknowledge the Minister of State's positive comments on credit unions and those made by many other Deputies. The programme for Government makes the commitment to enable the credit union movement to grow as a key provider of community banking in this country. I ask the Minister of State what has he done and what will he do to ensure to deliver on that promise.

Legislative change is essential to deliver on that commitment. I have just two suggestions. The Credit Union Act, as amended in 2012, is a child of the financial crisis. It failed to introduce proportionate regulation. We need legislation that is appropriate for credit unions, proportionate to the risks involved and ensures adequate capital reserves for credit unions. The current Act uses a sledgehammer to crack a nut and it is failing us. Our banks cost is €60 billion or €70 billion plus, and they needed strong regulation, but credit unions were very different. I recall the then Minster for Finance, Michael Noonan, saying there was a €500 million black hole underneath the credit unions. That was not true. The league's own funds covered the majority of any losses. I suspect our State is probably in profit right now because of the levies they imposed on credit unions to pay for future losses. Credit unions have paid their way.

Second, the register of credit unions must be fully independent. The Central Bank should not be the regulator. There is a possible conflict of interest and I believe the Minister must change that. The Minister of State has a golden opportunity to serve the citizens of this country by ensuring that we have a strong community banking sector underpinned by credit unions. If he does that, he will keep the promise that this Government made to the people.

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