Michael Fitzmaurice (Roscommon-Galway, Independent) | Oireachtas source

This is the first time I have been in a debate with the Minister of State since her appointment. I wish her the best of luck in her new position.

In respect of the Bill, I note the representative bodies of the credit unions emailed every Deputy about the pieces that are of concern to them. I ask the Minister of State and her team to be proactive in addressing their concerns. I know there are plenty of credit unions around Dublin but many people may not realise the role they play down the country. My home town of Glenamaddy had a Bank of Ireland and an Ulster Bank, both of which are now gone. The credit union, through amalgamation, got bigger. St. Jarlath's Credit Union now has something like €115 million or €120 million in savings. It is a large credit union. It provides services, especially to our elderly people. When people go into a bank to make a lodgement, they are faced with machines. While some of our elderly people may be able to work those machines, many others have never engaged with them or the technology involved. There is no friendly face available in the bank. I always say the credit unions have taken the place that was occupied by the banks in the 1970s and 1980s. When you went into a bank during those decades, there was someone to talk to. St. Jarlath's Credit Union in Tuam has a spotter who can walk over to anyone who is uncomfortable with the technology and put them at ease. That is important to ensure people get their business done, or whatever.

As Deputy Harkin has highlighted, there are certain issues in respect of reserves. There are credit unions in Ballinasloe and Roscommon. Many amalgamations are going on, which gives credit unions more flexibility to offer better services because a larger pool of money has been put together. That is a good thing. However, we need to ensure we never lose the local identity of our credit unions. One day, a long time ago, a few local people got together when the facilities were not there. Some of the buildings were done up voluntarily. Those people pooled together to give a service to people in local areas. Some of them offered small sums of money to allow a family to keep going and put food on the table, or whatever. We should never forget that ethos. I keep drumming into the representatives of St. Jarlath's Credit Union that they should never forget that heritage. I am in favour of credit unions growing bigger to allow them a bigger pool of money and the ability to offer mortgages and more services. However, I fear what will happen down the road, in five, ten or 15 years' time. Perhaps at that stage, it will be decided that a particular credit union in a certain village is not doing enough. They could go down the road of the banks, which we do not want to see because of the community and voluntary ethos.

There is a lot of opportunity. Credit unions, in fairness to them, offered money for the housing crisis. They have a lot of money in reserve. One thing in respect of which they were being fleeced, and this should be addressed, was the clearing of houses for money. Unless they were able to work together, clearing houses for cheques or money was costing them a lot to clear. The banks had a lot of control, to put it simply. That was causing a problem for credit unions for a good while. On top of that, they got screwed when interest rates were very low. We all love low interest rates but the credit unions were paying the banks for money on deposit. That was why they had to restrict the amount of savings some people could have in credit unions. They could not afford to be paying out at one end while getting nothing in at the other end.

I understand that credit unions offer similar services to the Government-backed Strategic Banking Corporation of Ireland, SBCI, and all of those.

It is important that they can offer the same services. The two banks in Glenamaddy disappeared and, up the road from it in Dunmore, the Bank of Ireland branch was closed. We had to do a bit of pushing and had to keep at Mick Culkeen, John Doyle and John Murphy, telling them that we needed a bank link, but the credit union has now gone down that road and is providing that service. It put in four bank links in the last few months. These are the little services we need in rural areas. When Bank of Ireland, Ulster Bank, AIB and all of the other banks leave smaller areas, there will still be a farming community and a business community in many of those areas. They need a facility to borrow money. There is now the Cultivate loan, which has been very successful, but when farmers are buying a bit of land, doing sheds or whatever, the biggest problem for many of the credit unions is the restrictive ratio as to what they can give out, which Deputy Harkin has highlighted. I am not going to rehash everything but that is a big problem. We have to make sure credit unions are facilitated in providing many of the services banks provide. I am not talking about loans worth millions. I am talking about people who want a mortgage of €200,000 or €300,000 or farmers who want to buy 20, 30 or 40 acres of land or to put up a block of sheds. In many cases, such people are accommodated. I want to say that very clearly. However, if there are more and more people engaging with the thing, a small bit of flexibility will be needed.

I am rather critical of the Central Bank with regard to some of the things it has done to credit unions. As has been said, in 2011 and 2012, credit unions put aside €250 million. No one else did it for them. They were not like the banks, which the taxpayers had to bail out. Off the top of my head, I believe something like €25 million or €30 million of the whole lot was used but the rest of the money was kept. The Minister of State will be able to tell me what it was kept for. I believe it was kept to do something with the Central Bank or to get the credit unions into some new phase.

Credit unions are the only banking system in most towns down the country. The Minister of State knows, as do I and anybody who is involved in business or anything like that, that credit unions need facilities. Credit unions have moved towards cards. They did a great job and it is working well. Many credit unions are now open on Saturdays and some are even open on Sundays. The service they give to people is incredible. The other thing I love about them is that there is someone to say hello to you. There is not a machine looking at you and telling you to press a button. We need to focus on that. There is a weight on the shoulders of credit unions, which is pulling them back, and we need to take it off them. I am not saying we should go mad and not have any regulation at all but we need to give credit unions the opportunity to fight in the ring with the other banking institutions and to let them have a fair crack of the whip.

There is another issue and I do not know how we will solve it. With regard to the savings or moneys credit unions have, banks are able to transfer funds via the European Central Bank and so on and it does not cost them anything. The credit unions need a similar facility. I have already highlighted the low interest rates. They need a facility that does not screw them up and result in them having to charge people for holding their money. What they had to do last year and the year before did turn some people off. There is no point in saying it did not. There were limits of €40,000, €80,000 or whatever. Different credit unions had different rates. People then had to do the usual thing and go to the bank or whatever. That needs to be looked at.

I will not talk here all evening. I welcome anything that is proactive for credit unions. I ask the Minister of State to engage with the different representatives involved. I also urge the Central Bank to loosen up with the credit unions because it is nearly like they are the bold child. The bank keeps picking on them the whole time while the others can get away with murder. I do not believe in that. I want to see the credit unions thrive. With the way decisions are being made, they are the only banking system we will have in rural Ireland. There will be online banking for businesses and so on that want to use it but I am talking about the day-to-day people who use the credit unions for their full livelihood from beginning to end. They have car loans, tractor loans and all of the other different types of things with the credit unions. We should make things amenable and workable for them. I thank the Minister of State for listening.

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