Alan Dillon (Mayo, Fine Gael) | Oireachtas source

I too thank the Minister of State for allowing me to discuss this Bill. I wish her the best in her new role in the Department of Finance. I know she will hit the ground running.

This is the first substantive credit union legislation for over 12 years. More important, this Bill has been welcomed and supported by the Irish League of Credit Unions, which says it has many positive aspects. That is an important endorsement.

Credit unions play an important role in providing financial services and support to communities in rural Ireland. They offer a range of services to their members, including loans, savings, current accounts, debit cards, apps and online banking. In my constituency of Mayo there are over 14 credit union institutions, including Claremorris, Charlestown, Foxford, Swinford, Ballyhaunis and Westport. They have high customer numbers and provide a vital service to businesses, farmers and individuals alike. Some months ago, St. Colman's Credit Union in Claremorris and Ballinrobe launched two new loan types to meet the financial needs of its farm and business customers with flexible repayment options that supported land purchases, farm developments, grant aid investment, machinery purchases and stocking.

In rural constituencies such as mine, traditional banking and financial institutions are often scarce or non-existent and credit unions provide a much-needed source of financial services, including savings account loans and other financial products. Along with the withdrawal of KBC Bank and Ulster Bank from the market, Bank of Ireland has closed three of its branches in Ballyhaunis, Charlestown and Kiltimagh, which the Minister of State knows well, over the past two years. The remaining seven branches in the county do not offer a counter service, just self-service machines. This is an issue the credit unions could address.

In some of our towns in Mayo, credit unions are the only financial institutions where customers can walk into the building and discuss their financial options with an employee. In contrast to traditional banking institutions, credit unions are owned and controlled by their members, who typically reside in the area. Those working behind the counter are local and provide a friendly, welcoming service, which means that all decisions about how the credit unions operate are invested in their locality, which can help support economic development and job creation locally. Credit unions often provide more than just financial services. They support community development initiatives, such as sponsoring local events, offering financial education programmes, and providing much-needed resources for community projects.

This Bill is an important first step in delivering the commitments of the programme for Government. It is also important that we may provide additional funding and supports to the credit unions to help them to expand their services and reach more communities. We need to encourage more lending in areas such as mortgages and small business loans. I would also welcome the opportunity for credit unions to be able to offer credit card facilities further down the road. From our engagement with local volunteers, regulations are always a challenge. There is an ask for streamlining and for it to be made easier for credit unions to comply with rules and regulations, while maintaining the necessary safeguards for depositors and investors. Many volunteers who make up the boards of credit unions are severely challenged by the bureaucracy they need to get through in the Central Bank regulations.

We need to encourage credit unions to collaborate and form partnerships with other financial institutions, company organisations and local businesses. We could incentivise them to develop innovative financial products and services, such as the one I previously mentioned, offered by St. Colman's Credit Union, which is tailored to suit the needs of the local community. We also need to provide credit unions with small products that will compete with AIB, Permanent TSB and Bank of Ireland, which currently have a monopoly on the financial market and which, despite showing record profits year after year, fail to pass these on to customers with additional incentives.

Overall, our local credit unions play a crucial role in providing financial services and support to rural communities in Ireland. By offering locally-owned and controlled financial services, promoting community development and supporting economic stability, credit unions are certainly helping to build stronger and more resilient rural communities. This Bill is the first step, as I mentioned, but we need to continue to engage with organisations such as the Irish League of Credit Unions to ensure these objectives are realised.

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