Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

I welcome the opportunity to contribute on the Bill and I wish the Minister of State in her new role. There are many positive aspects to the Bill but, as she said, I would like to see a vision for where we would like to see the credit union movement go for the next decade or so. Undoubtedly, credit unions are an integral part of every one of our communities. We all know the important role that they play in serving the community. My own credit union in Mullingar was the main sponsor for the Fleadh Cheoil last year. There was no monetary gain for the credit union but it saw the benefit of having the Fleadh Cheoil in Mullingar, it ponied up and was the main sponsor, when many of the main hospitality businesses did not provide the same level of funding when they were the ones that reaped the greatest reward.

I will focus on Mullingar Credit Union and its five sub-branches in Kinnegad, Rochfortbridge, Casltepollard, Longford and Lanesborough. Deputy Flaherty might focus more on that area. In that area to which I referred, the credit unions have 60,000 members. Of those, 35,000 or so are active members. It is fair to say that from a personal lending perspective, the credit unions probably have the market saturated. Some 40% of personal lending goes through the credit union. There is little capacity to increase on that. However, there is capacity to increase in the area of mortgage provision. Under the current regulations, the local credit unions can only provide, on average, 90 mortgages for a membership of 60,000 and an active membership of 35,000. That simply is not good enough. That is a failing. It is something that we should seek to increase because that is an area where credit unions could do more. Another area is business lending. With Ulster Bank pulling out of the market, credit unions can only offer an overdraft of €5,000 and they can only lend up to €25,000 without a five-year business plan. Plasterers, electricians or carpenters cannot borrow €25,000 to buy a van without providing a five-year business plan. That makes no sense in today's terms, because they can go down the road and get finance online. That is another area where there is capacity for the credit unions to do more.

Credit unions are totally out of sync with banks in respect of capital requirements There is a 10% capital requirement. Our local credit union invested €30 million with the Central Bank last year and it had to put €3 million aside because of that. One would imagine that the capital in the Central Bank is very secure and there would not be a need to put another €3 million aside.

It is in no way risk-weighted. The risk-weighted capital requirements were promised in 2012 by the Central Bank and have yet to be provided. That needs to happen fast.

Finally, the six credit unions to which I referred have €360 million invested. Of that €360 million, €350 million is invested offshore, or if not offshore in other jurisdictions. That does not make any sense at a time when the credit unions should be investing in the provision of social housing and the green transition. There is, however, not enough incentive to do that and we need to address that also.

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