Catherine Connolly (Galway West, Independent) | Oireachtas source

I dtús báire, cuirim fáilte roimh an deis a bheith páirteach sa díospóireacht seo. Tá an Bille seo thar a bheith tábhachtach. Tá na comhair chreidmheasa ar an bhfód ó 1958. Sin thart ar 65 bliain. Le linn na tréimhse sin, ní féidir luach a chur ar na seirbhísí agus an tacaíocht atá tugtha ag na comhair chreidmheasa do chosmhuintir na tíre. Tiocfaimid ar ais maidir leis na sonraí ach go hiomlán is céim dhearfach í seo. Bheinn ag súil gurb í an chéad chéim chun córas baincéireachta a chur ar fáil nach bhfuil bunaithe ar bhrabús.

I welcome the opportunity to take part in this debate. We are debating legislation that will empower and enable credit unions to put forward a wider range of services, which I welcome. Credit unions have been in Ireland since 1958, which is almost 65 years. I could not put a value on the work they have done and the services they have given, through thick and thin, during that time.

I would like to think that this first positive step is a step on our way to realising and implementing community banking in the real sense, a banking system that is not based on profit.

As for practical matters, I pay tribute to, and I have already congratulated, the Minister of State in her new role. I wish her the best. I thank the previous Minister of State, Deputy Fleming, who put in a tremendous amount of work on this and kept us informed every step of the way.

I am a little worried about a number of things. I will come to the positive ones. The Minister of State, Deputy Fleming, pointed out in his speech that the cúlra or the background to this Bill is the shrinking banking sector. That is a worry because the shrinking banking sector really should not be what is moving us to improved credit union facilities. This should have been proactively done as the way forward and to balance the unregulated, faulty banking system that brought this country to its knees. We should have taken action in respect of the credit unions a long time ago, like we are beginning to do with this Bill, giving recognition to the work they have carried out.

I thank the Library and Research Service again for its work. Its staff are always under pressure, not because of themselves - they do tremendous work in educating us - but because of the way in which matters come before them, always late. They are always under pressure, and that is not helpful. I do not know if the Minister of State has any influence on that. The Library and Research Service points out very helpfully to us the differences between credit unions and banks. It is very important to highlight some of them. Seven differences are listed in the Bill digest. The digest compares and contrasts, like a school essay. Let us look at the eighth difference listed, namely, that credit unions "Exist to attain the economic and social goals of members". That is crucial. On the opposite side, it is stated that the banks "Exist to maximise profit and shareholder wealth".

I should declare - I should have done so at the outset - that I am a proud member of a credit union i gcroílár na Gaillimhe, a credit union in Galway, along with 3.6 million other members of credit unions in Ireland.

Returning to the compare-and-contrast essay, the last difference listed states that credit unions exist for the social and economic goals of their members. They are not for profit. They "Conduct business solely with their members". Note here that they are not customers. We are customers of banks but we get no services, really. When we go into banks we have to talk to a machine. Credit unions' business is conducted for their members. Their "Members share a common bond, such as where they live or work". That common bond is very important. I know there are positive changes in the Bill in respect of extending that common bond. That is to be welcomed because if I cannot get a current account in my credit union in Galway, it cannot refer me to another credit union under existing legislation, so it is very welcome that that common bond would be extended but not lost. It is extremely important we keep it.

The digest states that "Credit union members elect a volunteer board of directors from their membership." Again, I know there are some changes proposed in the Bill whereby the manager could get on the board, which would be up to the credit unions. The banks "Typically serve middle-to-high income clients. No restrictions on clientele." "Shareholders vote for a paid board of directors [that is what the banks do] who may not be from the community or use the bank's services" etc. Back to the credit unions, "Surplus monies generated from business activities belong to the members". They belong to me and the other 3.6 million members. In contrast, with the banks, "Shareholders receive a pro-rata share of profits." The sixth difference is that "Financial services provided [by credit unions] are primarily basic savings and loan products with some ... [insurances]", whereas "A wide range of financial services are on offer" from the banks. I have no problem extending the range of services offered by credit unions. When I was obliged to change my bank, the credit union was my first port of call. Given the complexity of the way we are paid, it just did not suit. It was difficult. It was not easy for the credit unions to facilitate new members coming from various banks, including Ulster Bank. The Library and Research Service has conveniently set that out for us, and it is very important to keep it in mind.

On one other practical matter, we were led to believe by the Minister of State, Deputy Fleming, when he gave his speech to the Seanad and when he updated us, that this legislation is to give effect to the review of the policy framework for credit unions. Where is that policy framework? I would love to see it. My colleagues who work with me in my office have tried to get it. I have not seen it. I would really like to see what was set out in it and what we are acting on. Maybe we are acting on everything; I do not know. It is particularly important given that there was no pre-legislative scrutiny of the Bill. I do not know why there was no pre-legislative scrutiny. I know the Minister of State, Deputy Fleming, has highlighted more than once the number of stakeholder meetings he has had and the amount of work done, which is clear to see, but I would like that done in a more open and accountable manner because that is what this legislation is about. I note that there are non-legislative changes as well to bring about more openness and accountability, which I might come back to, but there was no pre-legislative scrutiny. Maybe the committee waived it. I would not think that is a good idea. This should have been thrashed out so we could see it and see the possibilities, what is not being done and what the necessary extra steps are that we need to look at in providing community banking, whether that is the credit unions, An Post or a brand-new agency. I do not mind - I am open - but I would like to be educated on this, and that has not been teased out whatsoever.

As has been pointed out numerous times, the Bill provides for "the establishment of corporate credit unions ... [to] enable credit unions to share resources and opportunities". Again, I have no difficulty with that. I do have a huge difficulty, like Deputy Mattie McGrath, with the word "corporate". I know the Minister of State has said that this has come from the credit unions themselves. Again, if this were debated and teased out with pre-legislative scrutiny, we would know where they were coming from and perhaps a different word could have been chosen to continue to reflect the ethos of credit unions, which are there to serve their members, not to make a profit, and certainly not get too big. If anything, and at the risk of boring listeners, we need to go back to local and smaller rather than bigger and more transnational. That is what we have learned from Covid and the banking breakdown and what we are learning from climate change, so I have huge difficulty with that word.

The Bill provides "the legislative basis to increase the maximum monthly interest rate on credit union loans". I understand that. It is to give flexibility and to increase it to 2% at a maximum, if necessary. I have already mentioned the option of placing a manager on the board. The Bill provides for extended services and flexibility with the common bond or an extension of the common bond. Then there are practical matters like the members of the board, the number of meetings per annum and the different types of administrative obstacles, which make perfect sense to me.

Over the 65 years since 1958, we have gone from having between 400 and 500 credit unions to having 204 now. That is good and bad, in a sense, because if the ethos of the credit union is to serve and to be there, there is a danger, as we make them bigger and bigger, that they become the very things we do not want them to be and they themselves do not want to be. Again, I pay tribute to the credit unions and the 2,500 volunteers, approximately. It is an incredible story, that of a service based on volunteers, with paid staff, that has been there through thick and thin to give loans to people, trust on both sides being of the essence in order that someone like me, or someone earning perhaps a lesser salary, can walk in and be treated the exact same and have the same respect and dignity shown to them but, more importantly, have the same rights, including the same legal rights, regardless of salary. It is an incredible concept and something from which we have to learn. That is why the publication of the review is very important in order that we see what is going on and where we should go in the future.

The other thing that struck me in the speech of the Minister of State, Deputy Fleming, in the Seanad was that he pointed out that approximately €20 billion in assets is held in credit unions, that a small percentage of that has been used for loans and that they have been utterly restricted as to how they can use that money.

The Minister of State pointed out and I know from having checked it myself - I thank again the Library and Research Service for pointing it out also in its Bill digest - that there are now vehicles in place that allow the credit unions to loan money to housing associations. Does the Minister of State have an update on that? I know the year in which these came in, and I am not taking issue with the year, but it often takes a long time for such a collaborative vehicle to become active. When did credit unions become active in the actual loaning of money to approved housing bodies? How many loans have been approved? If the Minister of State has figures and details on that, I would be interested to hear them. She can provide this information at the end of the debate.

I also acknowledge that there are non-legal aspects to this. I welcome that there will be a memorandum of understanding on this between the Central Bank, the advisory committee and the Department. I also welcome that there will be an increased emphasis on transparency within the sector. I welcome all of that.

I am worried about the use of the words "corporate" and "ventures". The Government seems to be learning how to do this better but forgive me if I am cynical at my age and with my experience of having watched the banks and having seen everything be commodified, from housing to health. Forgive me, therefore, if I do not have as much trust as I should in this system. The first thing is to publish the review. The second is to build a review into this legislation in order that we can examine whether it is attaining what it is supposed to be attaining. Third, we must go back to whatever mechanism is relevant to how we establish a community and national bank that is fully based on providing all the services on a non-profit basis that serves us best. As I said, whether that is the credit union, the post office or a new entity, that is one thing we have to have learned from the debacle of the banking crisis.

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