Holly Cairns (Cork South West, Social Democrats)
Link to this: Individually | In context | Oireachtas source

98. To ask the Minister for Finance the steps that he is taking to fulfil the commitment in the programme for Government for credit unions to become a key provider of community banking. [55634/22]

Holly Cairns (Cork South West, Social Democrats)
Link to this: Individually | In context | Oireachtas source

Credit unions are more important than ever. As households and family businesses are experiencing the cost-of-living crisis, credit unions are providing vital services to help people get through. However, they are still constrained by an outdated policy framework that is limiting their capacity rather than helping them serve their communities.

I appreciate the work the Minister has been doing in this area but when will the necessary reforms be brought forward?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I want to recognise the huge work the Minister of State, Deputy Fleming, has done in this. He has put incredible energy into assessing where we are from a policy perspective with a part of our economy he understands well, namely our credit union movement. He regrets that he cannot be here to take the Deputy’s question but he is representing us on Government business in Brussels.

The Government recognises the importance of credit unions as a provider of community banking services. The programme for Government contains clear commitments to review the policy framework, enable and support the credit union movement to grow support credit unions in the expansion of services and enable the credit union movement to grow as a key provider of community banking services. The review of the policy framework has been completed and in July the Government approved the drafting of legislation to implement the proposals. The legislation has received priority status for publication in the Dáil’s autumn session.

The policy proposals contained in the review address a number of different and important objectives. Cumulatively, the desired outcome of these objectives is to strengthen the role of credit unions as a provider of community banking and to enable them further to focus on priorities that will better position the sector to face the challenges and opportunities of the future. In developing this important work, the Minister of State, Deputy Fleming, has met the Irish League of Credit Unions, the Credit Union Development Association, the Credit Union Managers Association, the National Supervisors Forum, the Registrar of Credit Unions, the Credit Union Advisory Committee, the Credit Union CEO Forum and collaborative ventures. As I do my work across the country I find that virtually every credit union I meet has met the Minister of State, Deputy Fleming. He has done huge work on this and the proposals he has brought forward are very meaningful. I know they do not deliver all that the credit union sector wants but they are capable of making a difference. The Government will do its best to legislate speedily for them.

Holly Cairns (Cork South West, Social Democrats)
Link to this: Individually | In context | Oireachtas source

Many households and businesses are in crisis and credit unions are ready to provide vital assistance. Are the Minister or the Minister of State, Deputy Fleming, looking into what measures they can bring in immediately to allow them to take advantage of the place of credit unions in the community and their balance sheets? I realise the Minister and the Minister of State, Deputy Fleming, are pursuing larger policy reforms, which is so welcome, but are there any aspects of that which could be accelerated now to help the sector and communities in the more immediate future? Some 77 credit unions offer current accounts, including Access Credit Union and First South Credit Union in Cork South-West. With the closure of bank branches and entire banks that service will be increasingly important, especially in rural areas. What steps is the Minister taking to help more credit unions offer those current accounts? The Strategic Banking Corporation of Ireland has 19 credit unions engaged as SME lending partners. That is a welcome development to support and enhance the sector. Could the Minister clarify how he is helping other interested credit unions to enter that arrangement?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy is dead right. For example, in the early part of 2021 some 19 credit unions participated in the Covid-19 credit guarantee scheme. It was great to have those individual credit unions participate in that scheme. Beyond that, five credit unions were announced as participants in the Brexit impact loan scheme. If I look at the participation of the credit union sector within our lending landscape, the SME lending they are engaged in has grown by just over 15% year-on-year at the end of June. I am seeing positive signs taking place in that and overall some 77 credit unions are approved to provide current accounts.

On the measures we are bringing in, the Deputy asked if there are any that will make a quick and immediate difference. What we are bringing forward are measures that will be of help in the medium term. I continue to encourage credit unions to engage with their regulators so they can broaden the range of services they want to provide. I am encouraged that so many of the credit unions I meet have an increasing desire to do so. So many of them at local level represent the opportunities that are open to people as we see other regrettable changes take place in the supply of banking services in our country.

Holly Cairns (Cork South West, Social Democrats)
Link to this: Individually | In context | Oireachtas source

I encourage the Minister to look at the reforms that could be brought in quickly. The Minister will be aware that the credit unions have again topped the customer experience ranking for the eighth year in a row and they have even improved on their scores in the process. They are also continuing to innovate and adapt to changing circumstances. For example, the cultivate programme offers loans for things that farmers need, such as machinery, improving farm buildings or helping with cash flow. In west Cork the Bantry Credit Union recently bought the former Bank of Ireland building, which is symbolic of the changing retail and financial landscape, especially in rural areas. Those are just some of the positive and dynamic things associated with credit unions. I ask the Minister to imagine all they will be able to do when the financial regulations allow them to provide increased services and competitive loans to families, farms and SMEs.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is very positive to hear the example the Deputy has of the acquisition of the Bank of Ireland building in Bantry. I know the building the Deputy is referring to and I can only imagine that will have a positive impact on the presence of credit union services to her constituents. We will continue to work within Government with the sector to try to support it, in an appropriate way, in the development of its services to our economy. There is a rare opportunity ahead for this movement, which many of its members appreciate, in the changes they are making. This is in two different ways. First, as the cost of living becomes more intense for many communities the services our credit unions offer members will become even more needed and appreciated. Second, as the Deputy has shown in her example from Bantry, as other changes happen in the provision of banks, credit unions are taking their places.