Holly Cairns (Cork South West, Social Democrats) | Oireachtas source

I thank Deputy Harkin for producing this Bill, and the Independent Group for facilitating its discussion.

This Bill recognises the value of credit unions as volunteer-led community financial co-operatives and enables them to provide a greater range of services to members. Credit unions offer an incredibly important service in communities. We have one of the highest percentages of population who are members of credit unions globally. Irish people deeply value and use their credit unions.

Unfortunately, the legal and regulatory framework has not reflected this. There is a pressing need for the type of reform outlined in this Bill. Not only should all Deputies support it but the Government should facilitate its passing as soon as possible.

Credit unions provide local services and help whole cohorts who would otherwise be financially excluded. I was only able to do a masters due to the support of the Skibbereen credit union. There are many more individuals and families who are dependent on the financial facilities offered. Credit unions also help migrants and vulnerable groups enter financial systems.

Credit unions are also more accessible, with branches in towns and villages. At a time when commercial banks are leaving the Irish market and the remaining banks are closing rural branches, credit unions have never been so important. Of significance for many people is that they will be guaranteed to meet a staff member and not be directed to a machine. All of this is possible because credit unions are part of a volunteer-led movement with principles of inclusion, shared benefits, and service to members and the community.

Unfortunately, current financial regulations fail to appreciate credit unions' function as co-operatives and the importance of the common bond. Instead, they have excessive limits on their services and potential.

Credit unions are actively increasing their provision of finance in the areas of SME business lending and mortgages. Many are ready to provide much-needed services to local enterprises and family businesses to help address our housing crisis. In doing so, they would increase their viability and benefit their members. It is a win-win situation.

However, they are restricted by the concentration limits in the 2019 regulatory requirements which put artificial and anti-business controls in place on how much credit unions can lend for these purposes.

These artificial limits need to be removed. Then the credit unions can be overseen by supervisory and reporting tools rather than legislative barriers.

Moreover, Irish credit unions are subject to harsh capital requirements considering the profile of their balance sheets, international credit union frameworks, and the rules for competing financial institutions. This regime was brought in during the financial crash and has never been properly justified. The Credit Union CEO Forum and ILCU both have extensive reports highlighting this problem and suggesting more appropriate systems that reflect international best practice.

I recognise the Minister of State, Deputy Fleming’s work and commitment to reform of the framework surrounding this sector. I encourage him to help resolve the specific topics I have raised in the meantime. The Credit Union (Amendment) Bill provides structures to deal with issues like these by not only resolving them but also creating an architecture to respond to matters as they arise rather than having to wait years for them to be addressed. It is exactly the type of process this sector should have, reflecting credit unions' role in Irish society and helping them to thrive. The establishment of a credit union policy committee would provide a vital connector between credit unions and the Central Bank by reviewing and advising on the impact of policy.

Complementing this are the provisions which allow for the return of that link between the Minister for Finance and credit unions. Currently, there is a disconnect between the Department of Finance, which has responsibility for credit union policy, and the Central Bank which is responsible for regulation but which has no remit to appreciate the credit unions' volunteer-led, democratic organisation. In his response earlier, the Minister of State attempted to represent Deputy Harkin’s Bill as facilitating political interference in financial regulation. I think he knows that is not what the Bill is about and he heard Deputy Harkin make that exact distinction. She is asking for an official ministerial role in the process to create checks and balances, not interference.

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