Dáil debates

Wednesday, 3 November 2021

Credit Union (Amendment) Bill 2021: Second Stage [Private Members]

 

11:37 am

Photo of Thomas PringleThomas Pringle (Donegal, Independent) | Oireachtas source

I have long been highlighting the importance of community banking and I have previously called for the Government to expand the remit and the authority of our credit unions. I take this opportunity to welcome the Credit Union (Amendment) Bill introduced by my colleague, Deputy Harkin. I thank Deputy Harkin for bringing forward this very important Bill. I would like to comment on something the Minister of State stated. I do not think there is any danger of the Government raising expectations within the credit union sector. There is no worry in that regard.

It is vital that credit unions have the support needed to provide proper community banking services and to offer a sufficient alternative to mainstream banks. Following on from what happened in 2007, people in this country, understandably, have no faith and no trust in the banks who are so far removed from our local communities and from the communities' wants and needs. We need to ensure there is an alternative banking service that people can trust. People trust our credit unions. Fine Gael, and in particular the former Minister for Finance, Michael Noonan, did all they could to limit credit unions and to drive people to the banks, but the value of community banking cannot be overstated and Irish people know this.

Credit unions need to be pulled into the modern era. The unnecessary bureaucracy and restrictions they face need to be addressed. I met recently with The Rosses Credit Union in Dungloe, where the limitations these restrictions have on them were explained to me. We need to allow credit unions the ability to provide more modern financial services to suit modern-day needs. I believe the Bill takes the necessary steps to ensure this. I support this legislation to amend certain provisions of the Credit Union Act 1997 and its intention to allow credit unions greater flexibility to offer a wider range of services without needing specific Central Bank approval on each occasion. I also support the establishment of a credit union committee, which would be set up to review the impact of Central Bank policy on credit unions and to provide feedback to the Central Bank on its policy development process. One would imagine this would be already part of the system but it is not. It is important that credit unions have the ability to provide feedback and have some say in how they operate.

I support the requirement of the Central Bank that consent be sought from the Minister when prescribing the minimum regulatory reserve requirement for credit unions and the requirement that the Central Bank administers the system of regulation and supervision of credit unions in an appropriate manner. In short, we need to take away the absolute power of the Central Bank to dictate how credit unions are run. Independently run credit unions, which make their own decisions at local level, tailored specifically to suit the best interests of their members, are far more equipped in knowing and dealing with the needs of their communities than the bankers in the Central Bank in Dublin. These bankers are completely out of touch with local people and they have no real care, want or interest in ensuring that the community grows and succeeds.

Credit unions in my constituency of Donegal are invaluable. Constituents rely on community banking to access loans that mainstream banks would not even dream of considering for them. Many of the businesses in my community exist due to the funding provided by our local credit union, the sole interest of which is not to make profits for the stock markets or shareholders, but to see the community thrive. As a member of the credit union and as a member of the community, I have seen the incredible impact that a not-for-profit, member-owned financial institution with a community-based and volunteer ethos has had in my town of Killybegs and indeed in many towns across Donegal. These institutions are more important than ever now with the recent closure of so many banks across the county. It has been announced in the last few months that five Bank of Ireland branches in Bunbeg, Bundoran, Dungloe, Glenties and Moville are to close. This is a huge blow to my constituents, especially in south-west Donegal, who have been let down time and again. The withdrawal of Ulster Bank and the wind-down of its services over the next year will see the removal of all of its services as well.

We need our credit unions here now more than ever. We need to ensure they have the ability to provide the same financial services to constituents as banks without the restrictions they currently face.

If the Government is serious about actually wanting to revitalise our communities then I strongly believe that credit unions are an effective way to do this. Credit unions want to evolve and they want to change to suit modern-day banking, but for them to do that we need to address the regulatory roadblocks we put in their path. I believe that this Bill is a step in the right direction in doing that. It is about time that we recognised our credit unions as the invaluable institutions they are, and as institutions that serve the people and not the markets. That should be at the forefront of the Government's thinking at all times, because serving the people and not the markets is certainly not what is happening.

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