John Paul Phelan (Fine Gael)

I thank Senator Bradford for allowing me the opportunity to contribute on this matter. I concur with the sentiments of Senators Bradford and Coghlan. All Members have been lobbied by those involved in the Irish League of Credit Unions on section 35 of the 1997 Act.

In 1997, there were probably legitimate and understandable reasons these limits were imposed. Ireland has changed much since then and the credit union movement has grown dramatically. It has many thousands of members to which it provides a valuable service. The credit unions are structured to reflect the local circumstances of the areas they serve, whether urban or rural. They are seeking to have a level playing field with the commercial banks.

The Minister for Finance must review section 35 to ensure the credit union movement is treated equally with other financial institutions in loan terms. A ministerial order amending the section would have a great impact on credit union members. Only 30% of the credit unions' loan books are limited to loans of over five years. That is a small proportion and, as a result, the credit unions find themselves having to invest much of their money in the commercial banks. As Senator Coghlan pointed out, we do not want a situation where people are forced into the hands of moneylenders because of the imposition of these limits. After nine years, it is time the Department of Finance reviewed the loan term limits.