Dara Calleary (Mayo, Fianna Fail)
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93. To ask the Minister for Finance his views on the credit union’s common bond. [62244/21]

Dara Calleary (Mayo, Fianna Fail)
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I would like the Minister of State’s views are on the common bond for credit unions. Has the Government any plans in this space? We also might have an opportunity to discuss the work that the Minister of State doing on credit unions. He is putting significant work into this. In yesterday's update from the Central Bank of Ireland, the ambition and the hunger of the credit union sector was not reflected or acknowledged in the language it used.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I thank the Deputy for raising the issue of credit unions and the great role they have in society.

Recent opinion polls have shown them to be the most trusted brand consistently over recent years. The Central Bank issued a report yesterday about the challenges facing credit unions so I will briefly bring people up to date on that. Credit unions' financial situation improved in the past year. Of the 210 credit unions in the country, all but nine were in surplus in the past 12 months, which is positive and is much improved from the previous year. The report pointed out that relative to the amount credit unions are saving, their loans are only 27%. That is the issue with growing their loans. There are many schemes for businesses and so on but they are still concentrating on personal loans, which have been their bread and butter over the years. They have reduced some of their deposits with caps introduced by individual credit unions, and that has also prevented the situation deteriorating.

On the matter of common bonds, section 6 of the Credit Union Act 1997 sets out the requirements in relation to the common bond. The credit union advisory committee, CUAC, in its review of the implementation of the recommendations in the Commission on Credit Unions report in 2016, recommended that the common bond be subject to detailed consideration in consultation with stakeholders. The credit union advisory committee is a group established by the Minister to advise him or her on credit union issues. That matter is currently being examined, and when I get the opportunity in a few moments, I will tell the Deputy about the review progress. I expect the Government to approve significant proposals regarding credit unions early in the new year.

Dara Calleary (Mayo, Fianna Fail)
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I thank the Minister of State. I would like some detail on that review process and its timeline. Will that happen in the first quarter of next year? Will the recommendations the Minister of State is hoping to bring require legislative change? If so, do we have any sense of a timeline on that?

A number of us met with credit union representatives a few weeks ago and the Minister of State was on that call. There was a sense of ambition from them, a sense of wanting to respond to the various challenges facing communities. With banks withdrawing from them, the credit union is the perfect organisation to step into that sphere right across the country. There was also a sense that they wish to do different things to respond to different demands. It is quite interesting that yesterday's report from the Central Bank highlighted climate change as a challenge for credit unions, whereas the credit unions see climate change as an opportunity to partner with communities, homeowners and families to respond to it. I ask the Minister of State to comment on the review, the timeline and any potential legislative changes.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I thank the Deputy. On climate change, credit unions are exceptionally well placed to provide loans for retrofitting schemes for individual houses throughout the country. As regards the common bond, in 2017 CUAC made five recommendations to open up the common bond to assist credit unions in developing their business model and growth potential. Those recommendations included the removal of the anomaly whereby credit unions are prohibited from introducing businesses to each other but can introduce businesses to other financial institutions. Any changes to the common bond should happen promptly and the rules regarding common bonds should be made clearer and be better communicated. In most cases the arrangements for common bonds have been in place for a significant period of time and not many people know the particular boundaries in that regard. CUAC made those recommendations but they were not progressed at the time because there was resistance in the area. I will have recommendations in the early part of next year, certainly early in the first quarter.

Dara Calleary (Mayo, Fianna Fail)
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Those recommendations make complete sense. The Minister used the word "promptly". Those recommendations were made in 2017 and we are now in 2021. Will the new proposals mirror some of those recommendations? Where did that resistance come from?

Seán Fleming (Laois-Offaly, Fianna Fail)
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The resistance came from the main representative bodies in the credit unions at the time, which did not want to touch the common bond because they felt it was established in the first place for very good reasons and they did not want to move on that. I have met all the representative bodies in the credit unions a few times in the past year and we now have movement from all the main credit union organisations on some refinement of the common bond boundaries and improvements to share and syndicate loans between different credit unions. We are not going to unravel the entire structure of the common bond. There will be improvements to the common bond structure, and what I will be proposing is substantially agreed by all the bodies at this time. I will send them a formal document early in the new year. That may require legislation and that will be progressed as soon as we get approval. I will ask the sector to respond promptly when we issue the proposals because we have covered this ground entirely. I gave those organisations a commitment that I will come back to them with one final draft before we publish it. I will seek their input early in the new year.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Tá an chéad cheist eile in ainmneacha na dTeachtaí O’Dea, Lawless agus Cowen.

Cathal Crowe (Clare, Fianna Fail)
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Scríobh an Teachta O’Dea ríomhphost chuig oifig an Chinn Comhairle ag athrú na ceiste chugamsa.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Fadhb ar bith.