James Reilly (Fine Gael) | Oireachtas source

I welcome the Minister to the House and the opportunity to contribute to this important debate because, to my mind, credit unions have been a bulwark for many communities in this country and the saviour of many a small business.

We are all aware that more competition is needed in the banking sector. We are also aware that the pillar banks have moved away from communities and have moved services online. They are more interested in bigger businesses rather than small local investors, savers and so on. Many people, especially older people, still value face-to-face interaction. Nobody is better placed to do that than people in the credit union movement who are part of and know their communities. Very importantly, they know what is going on in their communities. They live locally and, therefore, are very accessible to people.

I welcome many of the report's recommendations. The Irish League of Credit Unions welcomed certain elements. We would all be happy with strong regulation, but we want a wider opportunity for credit unions to invest in their communities. Senator Lawlor mentioned that he had concerns about the implementation of the tiered regulation of credit unions. My understanding of that would be that it would allow different credit unions of different sizes to avail of opportunities suitable for their balances and what they had in reserve. I note they also want a full review of section 35 lending. I certainly support that. Anything which allows credit unions to develop and grow beyond the current permitted limits is to be welcomed.

A new appeal mechanism should be introduced. We often get the sense that the Central Bank, in which we have huge trust, sees things from a single perspective, that is, a fiscal perspective, and perhaps does not view things from a community perspective as well. Of course, we want investors' money to be protected, but that protection should not limit the ability of credit unions to invest.

Credit unions and others are worried that the regulatory reserve ratio is too crude and blunt an instrument which does not take into account the risks faced by credit unions. That relates to the original point about the tiered system.

We would like the credit union movement to be empowered to contribute to the alleviation of the housing crisis in the State. I welcome that on 1 February the Central Bank made a decision to allow credit unions to have a role in funding social housing through tier 3 approved housing bodies. The figure involved is only €700 million, but they could invest billions of euro and fund tens of thousands of houses.

This goes to the core of the ethos of the credit union movement. It wants to reinvest in communities and there is no better way to do that than through housing. Why can it not become involved in the provision of affordable and private housing and mortgages? With proper regulation this would be a important step forward which could secure our a future in a broader sense. One of the major challenges facing multinationals coming into the country is getting accommodation for the workers who come with them.

Credit unions have, of course, had trouble. I live in Rush and Rush and Lusk ran into trouble, as did Newbridge. The key point is that levies and contributions imposed on the credit union sector have a legal basis which need to be checked.

The committee acknowledged that the Irish League of Credit Union's savings protection scheme has provided €73 million in stabilisation funds to 64 credit union without any resort to taxpayer funds. This means that no taxpayer's money has been used to protect credit union investors and clear up the problems they have experienced, something which cannot be said about the pillar banks.They also still have a stabilisation fund of €90 million. This issue needs to be addressed at every level. I believe the Minister of State's heart is in the right place and that he will look positively at this issue and afford more people the opportunity to avail of the funds available through credit unions. Experience has shown us that they have been and continue to be the most family and customer friendly banks in Ireland today.