Tom Brabazon (Dublin Bay North, Fianna Fail)
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11. To ask the Minister for Finance his plans to engage with the Central Bank to review credit union lending limits to enhance their ability to serve their members. [5037/25]

Tom Brabazon (Dublin Bay North, Fianna Fail)
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Gabhaim buíochas leis an gCathaoirleach Gníomhach. I dtús báire, ba mhaith liom a rá gurb é an chéad bhabhta dom a bheith ag labhairt os comhair an Tí seo. Teastaíonn uaim buíochas ó chroí a ghabháil leis na daoine i nDáilcheantar Chuan Bhaile Átha Cliath Thuaidh a chuir anseo mé. Is mór an pribhléid agus an onóir dom a bheith anseo agus teastaíonn uaim buíochas ó chroí a ghabháil le mo bhean chéile Liz agus mo chlann féin, mo thacadóirí, baill an pháirtí agus mo chairde uilig ar fad a chabhraigh liom san fheachtas chun teacht anseo.

I thank my family and the party members, supporters and friends who got me here. It is a wonderful privilege to become a Member of this House. I sincerely thank them. I say to the people of Dublin Bay North who put me here that I hope to repay their trust with diligence and hard work.

Does the Minister of State have any plans to engage with the Central Bank to review credit union lending limits to enhance their ability to serve their members?

Robert Troy (Longford-Westmeath, Fianna Fail)
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I compliment Deputy Brabazon and congratulate him on his election and his maiden contribution to the Dáil. I wish him well in the years ahead and assure him that any support or help we can give him in his endeavours to represent the people of Dublin Bay North will be forthcoming.

In January 2020, revised Central Bank lending regulations were put into effect on credit union house and business lending only. There is no regulatory limit on personal, unsecured lending which comprises approximately 87% of the credit union loan book.

At that time, the feedback statement set out the Central Bank's intention to perform and publish an analysis of credit union sector lending three years post the commencement of the amendments to the lending regulations in order to assess and analyse the actual impact which the changes to the lending regulations have had and to inform any decisions on the need for future change. The Central Bank commenced that analysis in quarter 4 of 2023 and consulted with credit union stakeholders on this matter. The former Minister of State and my officials had multiple constructive and open engagements with the Central Bank as part of that review.

On 11 December 2024, the Central Bank published consultation paper 159 - Consultation on Proposed Changes to the Credit Union Lending Regulations alongside a report on credit union lending on the Central Bank website. In the consultation paper, the Central Bank is proposing a number of targeted material changes to the credit union lending regulations in concentration limits for house and business lending and lending practices for specific categories of lending.

The Central Bank is now consulting on the following proposals for change: decoupling the limits to prescribe new separate concentration limits for house lending and business lending; removing tiering whereby all credit unions regardless of asset size may avail of the same concentration limits; and adjusting the lending capacity available to all credit unions for house and business lending, within the new concentration limits with house lending to be 30% of total assets and business lending to be 10%.

Tom Brabazon (Dublin Bay North, Fianna Fail)
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I welcome that there is a substantial section in the programme for Government on credit unions. I also welcome the pledge that has been honoured to retain a dedicated Minister of State with responsibility for financial services, credit unions and insurance. I congratulate the Minister of State on his appointment to that role. I also wish to mention the former Minister of State, Deputy Fleming who made a very significant contribution to this whole area in the last Government.

Late last year, the Central Bank of Ireland published a review of the regulatory framework for credit union lending and launched a public consultation on proposed changes to the framework. The proposed changes will ensure the regulatory framework remains appropriate to the sector and will provide greater scope for the those credit unions which wish to undertake further house and building lending. Does the Minister of State expect to make progress on this soon?

Robert Troy (Longford-Westmeath, Fianna Fail)
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I also compliment my predecessor in this role, the former Minister of State, Deputy Fleming as well as Ministers of State, Deputies Richmond and Carroll MacNeill who did a lot of work in the area with the review of the credit unions which are such an important financial institution in all our communities right across this country and provide a great service. Take unsecured personal lending. Some 87% of credit union loans are personal lending but they do have the capacity to offer services in the area of mortgages and business lending. That is why the proposals are there now to increase the capacity to 30% in mortgages and 10% in business lending. We are in the process of finalising that. I will meet the relevant officials in my Department and the Central Bank in the coming weeks to try to bring that to a conclusion. It is good news for credit unions. I know from engaging with my own credit union in Mullingar, the North Midlands Credit Union, that it is looking forward to these new lending limits so it has the opportunity to offer greater services to its customers.

Tom Brabazon (Dublin Bay North, Fianna Fail)
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The whole idea of increasing the lending limits will introduce a better service to the credit union membership as well as increasing competition within the financial services sector which is very welcome. I look forward to that.

Has the Minister of State had a chance to engage with the credit union movement on this proposal since his recent appointment? Has consideration been given to bringing the credit union movement under the scope of the dormant accounts legislation?

Robert Troy (Longford-Westmeath, Fianna Fail)
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I have not formally engaged with the credit union yet but it is on the agenda in the coming weeks. However, I have engaged informally. My own credit union had me at its schools table quiz last Thursday night and used the opportunity to talk to me about some of the challenges it is facing. I will be engaging with the credit unions in the coming weeks. The Deputy will be aware that the programme for Government contains a commitment to establish a five-year strategy to set out clearly, in consultation with the credit union movement, how we would like to see it develop and grow over the next five years. Credit unions do provide an invaluable service in their respective communities and offer an opportunity for greater competition in the financial services market. I will work with the credit union movement and Members in this House to clearly set out how we would like to see, develop and grow it in the coming years.

I engaged with my officials on the dormant accounts question earlier this week. How that might work in the future is under review.