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

To date in 2022, I have had 13 meetings with various credit union stakeholders, including the representative bodies, the Credit Union Advisory Committee, CUAC, and individual credit unions. I have also spoken at the AGMs of the Irish League of Credit Unions, the Credit Union Development Association, CUDA, and the Credit Union Managers Association, CUMA, as well as at the National Supervisors Forum summer forum just last weekend. I have met various credit union representative bodies which broadly supported the proposals emanating from the programme for Government review of policy framework. The review has been completed and legislative proposals will be brought to Cabinet shortly.

Significant work has been carried out in this area in the past 18 months. All the representative bodies attended a meeting in the Department that I chaired on 10 March 2022 and agreement was reached on 12 of the 14 proposals. The legislative proposals are scheduled to go to Cabinet in the next week or two, when we will have more information on them. I stress that we are not dealing with or infringing on the role of the Central Bank in terms of regulatory requirements. Those are for the Central Bank as regulator. The Department of Finance, politicians and the Government should not be involved in regulation, as I am sure the Deputy appreciates. We will have further information on the proposals as soon as they go to Cabinet.

There is general support for this area. The programme for Government has four measures on credit unions, all of which are important. The most important is the aim to grow the credit union movement. I have never engaged with credit unions without making a specific point, which I will repeat now. They must grow their lending books. I am aware that some people will talk about Central Bank restrictions. Those restrictions mainly deal with credit unions' deposit rates and how much they have to hold in reserve. The biggest issue facing the credit union movement is that a generation or two ago, credit unions were lending out 60% of their assets in loans. The majority of their members were saving and taking out loans. Recently, I have met with credit unions that are only lending to 15% of their members. The average loan-to-asset ratio in the credit unions is 26% or 27%. That is not sustainable. It has to be 36%, 46% or 56%. They lend money at a rate of 6% or 7%, on average. That is how they will become more sustainable in the future. They need to lend more money via credit, rather than serving as institutions for saving.

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