Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I thank Deputy Harkin for bringing this Bill before the House. In a time of pandemic and economic downturn, the credit union movement has served the local needs of the communities within which it is embedded. We all agree that credit unions are trusted, visible and they understand what makes and strengthens communities. Just this month, credit unions maintained the top spot for best customer experience at the customer experience insight awards for the seventh year in a row. They hold this position among the Irish people because they treat their customers and members with respect. They respond to their needs and their circumstances and, with more than 300 credit unions throughout the island, one in two people in Ireland has a credit union account. It is a movement that places people above profits, benefits its members not its shareholders, and is embedded in the community.

During the pandemic, credit unions stepped up and served their members. The ethos of the credit union movement should be contrasted with that of the commercial banks, which used the public health restrictions as an opportunity to close down branches in our communities negatively impacting customers and communities that are remote, lack decent access to broadband or require assistance in adapting to digital services. Credit unions, in stark contrast, have remained accessible and responsive.

In May, the State's largest moneylender, Provident Financial, withdrew from the Irish market. The immediate reaction of the credit union movement was to remind people that credit unions provide affordable and ethical loans that meet the needs of those in need of credit, unlike high-cost credit providers, such as moneylenders, who are permitted by the Government and the Central Bank to charge annual percentage rates, APRs, at an eye-watering 288% when collection charges are included. My legislation to cap the interest moneylenders can charge, which is currently before the finance committee, was introduced in the knowledge that credit unions can serve our communities through the provision of affordable and ethical credit, but only if they are supported and not held back.

It is long past time we unlocked the potential of the credit union movement. Its viability and long-term existence are at stake. Communities need credit unions to thrive and not merely exist. Either their decline can be managed or they can be empowered to thrive and increase their footprint in the financial services market through increased products and services. That begins by addressing the issue of under-lending. With an asset base in excess of €19 billion, credit unions have the potential to increase support significantly for communities, customers and businesses. That includes the ability of the credit union movement to support and extend credit to increase social housing stock, since credit unions hold up to €900 million of finance, through social housing and the retrofitting of more than 500,000 homes by 2030. In September, the Central Bank approved the establishment of the credit union approved housing body fund that will see an initial deployment of €200 million over the next 12 months. While this is welcome, so much more can be done to unleash the potential of the credit union movement so that it thrives and not just survives.

The provisions in the legislation before us relate to specific issues in credit union policy and regulation. There is a need for the Government to adopt a comprehensive credit union policy and agenda for reform. At present, the Government does not have one, despite commitments in the programme for Government to enable the credit union movement to expand and grow. It is now more than two-and-a-half years since the final report of the Credit Union Advisory Committee, CUAC, report implementation group. That was published in January 2019 and there has been no movement on any of its recommendations. That is simply not acceptable. I am also aware that the credit union movement submitted a comprehensive and extensive set of proposals to the Department of Finance and to the Minister of State in February of this year. Has he even responded to that set of proposals? If not, when will he?

The Government's approach thus far has been slow and piecemeal. It is time that any reforms of the credit union sector are done in a comprehensive manner. Deputy Harkin has sought to advance the cause of the credit union movement with this legislation and give voice to the need for reform. I commend her on her work in this area. Sinn Féin will support the progression of this Bill to Second Stage. The Minister of State should not use the tactic, over and over again, of stalling legislation by placing a stay of nine months on it. He has done it a number of times with legislation I introduced that was focused on consumers. However, on this legislation, we have some reservations about elements of the Bill that require further scrutiny. That is why it should go to the next stage, which involves further scrutiny. There is a diversity of opinion within the credit union movement, which was made clear, for example, in the policy paper on the common bond published by CUAC in December 2017.

We want to see the credit union movement strengthened and united through comprehensive reforms. That is where it is incumbent on the Minister to act. We also have concerns about section 6 of the Bill, where the wording is unclear on the aims and objectives in giving sites authorisation under financial services legislation without specifying the legislation in question. However, these issues and other provisions can be scrutinised on Committee Stage together with the broader health and direction of the credit union movement.

It is now time for the Minister of State and his Department to come forward with a plan for the credit union sector, one that will strengthen it and the communities it serves. He should not delay this legislation moving to the next stage. It is an important contribution to this debate and it will inject a little energy into it.

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