Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank Senators for their contributions and support of this legislation, which will formally dissolve the Credit Union Restructuring Board, ReBo. The Government recognises the importance of the role of the credit union sector as a volunteer and co-operative movement and the distinction between it and other types of financial institutions has been stated well by several Members.

There were 156 credit unions restructured in 82 projects, involving assets of €6 billion across 24 counties. The final review of ReBo concluded that the board had completed the performance of its functions with positive results and the Minister for Finance has decided to proceed with the orderly winding down of ReBo. This legislation passed all Stages of the Dáil last year in a very straightforward manner, without amendment, and it would have come to the Seanad at the beginning of this year except for elections and everything else that has happened. That is why it is only coming here now.

Several comments were made to which I can respond. A final report will be produced when ReBo is wound down and I am told there is approximately €400,000 in the account to be handed back to the Minister for Finance when this is completed. I was asked whether a post-restructuring report was produced by ReBo when restructuring or amalgamations, which they were in most cases, happened. This would come under the Central Bank's remit and there would have been further onward monitoring afterwards. There would be no issue in that regard.

There was a question of whether we have acted too hastily, given how many amalgamations happened. The rate seemed to slow but there was significant urgency several years ago because of the financial crisis. It is about keeping the process time-limited and not letting it run forever. A number of credit unions are now, of their own volition, choosing to amalgamate with others and they do not need financial support from the State or taxpayer to do this. They are well able to do it with their own resources.

There was a question of whether credit unions are operating well for members. They are and we hope they are keeping many moneylenders at bay. Money laundering was mentioned and credit unions have helped prevent such problems in their activities in local communities.

People have mentioned lending restrictions and although there are certain caps, there is plenty of headroom. I have met people from umpteen credit unions in my short period in the job to date and although they might complain about only being able to issue 100 mortgages from a credit union, in reality they have offered none. They might say they have not issued any mortgages because they can only issue 100 mortgages. I tell them that we might see if they can go further once 30, 40 or 50 mortgages have been issued. This demonstrates a bit of reluctance in credit unions to take that brave step of getting into mortgages.

Everybody has mentioned approved housing bodies and the need for funding but the future of credit unions is in the mortgage market and enabling people to buy their homes. If a credit union provides a mortgage, people will be happy with the loan and the credit union could have that family for life. It is the future of the sector.

The question was asked as to whether credit unions could lend more. There is much money to lend and I encourage them to lend more. There is a limit, and everybody has a limit, but none of the credit unions is near that limit yet. The problem is there is too much money on deposit, and this might cause them to lose money. The best thing we can do for credit unions is help them grow their loan books. That is where they will make interest and profit, continuing the process for the next generation. I would really like to see them carrying out more work in the mortgage market. Some have already started that work but I encourage more to do it.

The legislation allows for dissolution by ministerial order but there are aspects of the Act in question that must be continued, and these are being taken over by the Minister. There is no provision in the Act for those powers to continue if there is dissolution by ministerial order, so the Attorney General has requested that this process be done formally in legislation. It is to enable those powers relating to some outstanding levies to be transferred to the Minister.

There was mention of a lack of demand for loans and I encourage the credit unions to do more in the area. There is also the question of reserves and there is no need to allow for review of more lending, as there is already scope for more lending. I only wish they would loan more money. Great tribute was paid by a number of Members who saluted the founders of the credit union movement many years ago. Many people in many households would not have got school supplies, the dishwasher or washing machine without their help but credit unions must think a little bigger than household appliances now. There was a time when credit unions were great for giving out car loans but most of the garages now have their own finance arrangements in place so that market has been taken over.

I encourage credit unions to get back into student loans, for example. If a student will be in college for three or four years, the business could be done in the first year and it could be rolled forward each year when a loan is in order. There would be less paperwork in years two, three and four. I also mention the mortgages as well.

There is synergy between the credit unions and An Post. An Post seems to be doing its own work and I agree they are kindred spirits, to an extent, and they are both involved with local communities. It is a matter for An Post to consider and it would not be appropriate for the Minister to make a direction in that regard. The point is well made.