Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank the Deputies for sharing their views. There were 16 or 17 speakers, which indicates the significance that Members attach to this issue. Sessions such as this show the range and volume of issues that require consideration when there is an attempt to dissect a system that touches on so many elements of our daily lives. It is also a very good reminder of the pressure that banking is under due to changes in technology and regulatory requirements on one hand and the demands on banks by customers who see the world change around them on the other, and who use technology in a way that only a few years ago we would have felt was unlikely.

The way the public interacts with banks, credit unions and other financial providers has changed fundamentally, and this has been accelerated by the pandemic. Many will still need or want to carry out their banking activities in person. Credit unions and An Post have significant branch networks in addition to those of our retail banks. The Government is, and will continue to be, supportive of the financial sector meeting the needs of households and firms to achieve their financial, economic and social needs.

As the Minister for Finance pointed out earlier, the Department of Finance will undertake a broad-ranging review to look in detail at the many relevant issues in the banking sector. We must recognise that much change is under way. Ireland has had a difficult few months with regard to that change. For the review to be a process that will signpost how banking can deliver for society and the economy, we must recognise that people are seeking banking services through electronic and card-based systems. While there is a variety of needs we want to meet, we may have to meet them in a different way in future. We need a process that provokes and invites genuine debate rather than seeks to preserve the present situation in its entirety. I was impressed by a Deputy saying that it was not about preventing branches closing but about opening new doors. That must underpin the review. The future will happen whether we like it and we need to be part of it, to plan for it and be proactive. I assure Deputies that the review will involve extensive consultation with all relevant stakeholders. There is a process to be followed, including modalities and the time scales involved. The Minister will announce its details as soon as practicable.

Many of the issues raised by Deputies overlap with the issues that the Minister and I have been considering all along. We will take on board everything that has been said but we are clear that we want to end up with tight terms of reference that can deliver solid and achievable results in a reasonable timescale. Some asked for that and stressed the importance of that and the terms of reference. We do not want a review that goes on for three or four years because time will pass us by.

In addition to the banking review, the Government is progressing a review of the policy framework for credit unions, which is a programme for Government commitment. I have met many credit union stakeholders in recent months and we will meet again before the summer recess. Many meetings are taking place. When the Bank of Ireland branch closures was announced as well as Ulster Bank's withdrawal from the country, I immediately met with some of the key credit union organisations to put it to them that this was an opportunity as in many cases they will be the only financial institution left in many towns and locations. I am encouraging them to take this as an opportunity to grow small and micro businesses in those areas as well as local customers who may not want to travel outside the region following the bank branch closures.

There is an opportunity for the credit unions and it is important that they actively go after that opportunity and not to wait for a banking review to conclude down the road. The movement must develop, as a matter of urgency, collaborative approaches to develop structures and expertise needed to develop its business model. Some of them cannot do all the mortgages on their own but if a group come together on a collaborative basis, they will be able to provide scale and I am particularly interested in understanding how credit unions can grow the SME and mortgage lending sustainably.

It is not possible to comment on all the points raised in the past few hours but every one has been taken into account. Deputy Mairéad Farrell began by talking about banking culture and public trust, senior executives and accountability. The heads of Bill will be published before the summer. She also mentioned the mortgage resolution process, the exit of Ulster Bank and KBC and the sale of the Bank of Ireland shareholding and the Government's role in that. I stress the bank's independence in this regard is protected by a relationship framework, which was insisted upon by the European Commission to protect competition in the marketplace. A European framework is in place to deal with Bank of Ireland and other key banks. The role of credit unions was also mentioned. Deputy Nash also mentioned the Bank of Ireland shareholding and the need for the forum to be a broad-ranging review.

Deputy Calleary mentioned tracker mortgages and how they contributed to an erosion of trust. Others referred to that as an example of the culture in banks with which other people take considerable issue. Ulster Bank's staff were the last to hear of its withdrawal. We definitely need to have improved communication on key issues that effect people's livelihoods so that they do not hear about it on the 8 o'clock news some morning when they turn on the radio.

Mica and pyrite were also mentioned. The banks were brought into the issue because they have mortgages on many of the properties and they should have been more proactive dealing with their own assets that they knew were not worth the amounts given for the mortgage while their assets were crumbling before their eyes. The discussion on mica cannot be completed without the banks being brought to the table in some respect because while we are protecting people's homes, to some extent we are also protecting the assets of the banks, which have a role to play in this issue.

A couple of Members asked questions about the reason banks such as Ulster Bank and KBC are withdrawing from Ireland and the reason we have no new entrants coming in. That is one of the most fundamental questions that has been highlighted here. It is very easy to talk about branch closures but we must examine what is happening here that banks are leaving because they do not feel it is a proper place to do business. That is an issue we must address. It is not only a problem that banks are leaving the country, but we are not getting new banks to come here. That issue must be examined to make sure that we have a viable, sustainable and competitive banking industry in the future.

It was also suggested that when Ulster Bank, KBC or Bank of Ireland leaves a town they should give the bank to the local community. I suggested that from day one. Many bank branches are in key locations in main towns and many of the premises are in good condition. Local authorities, through the Department of Housing, Local Government and Heritage, should consider possible uses for some of these buildings. The last thing we want to see is the banks walking away. They are such big buildings they will not be easily sold to people in the private sector and we do not want them to become another source of dereliction on streets in so many towns around the country. I ask the Department of Housing, Local Government and Heritage to engage on the issue to see if there is scope for these buildings to be put to good community use or for housing, which would regenerate many of the towns where these branches are closing.

Public banking was mentioned, as were credit unions, extensively. Deputy Shortall said a third of the bank branches in this country have closed or are closing over a seven-year period. That mirrors what is happening banks everywhere throughout Europe and in the United States. There is a bigger picture. That is the reason I said we must ask why banks are leaving. What is happening with bank branches in Ireland is what is happening everywhere. For that reason we must look to the future and open new doors, not try to prevent the doors we have from closing, which has happened in many cases. Local businesses want to have local banks in the area. The legacy debts of AIB and Bank of Ireland are giving rise to issues in many cases. Tied agents were also mentioned.

The legacy of the financial crash was mentioned. What we want to do is talk about the future of banking. We had a major debate here today about the problems of the banks in the past ten years. Resolving the problems of the future will not be done by exclusively focusing on the past. I would like to see much more forward thinking about how young people are doing their banking. Some use cards to get cash. They are also more active customers in some of the new financial organisations than some of the established banks.

I thank all the Deputies for their contributions. Everything that has been said in the debate will work its way into the consideration as part of the terms of reference on the review of the future of banking.

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