Sharon Keogan (Independent) | Oireachtas source

I welcome the Minister of State to the Chamber. He has been instrumental in bringing the credit unions forward in terms of how we do banking in this country.

Now is an important time for credit unions in this country. As we come out of Covid and the economy picks up again, the reinvigorated movement of money around the country presents great opportunities to examine our financial systems and improve upon them.

There seems to be a joint understanding that the role of credit unions can be built up to better meet the needs of communities. Last month, the Minister spoke about the need for the unions to fill the gap. The further involvement of the unions in the mortgage industry would provide greater options to borrowers and help offset further consolidation of the banking sector.

Last week, Senator Boyhan referred to the call made by the Irish League of Credit Unions, ILCU, to the Minister of State. He said that the league would like the Minister of State to make the regulatory changes to enable credit unions to increase their footprint in the mortgage market and that the unions be enabled to become key providers of community banking as per the programme for Government. As the Minister of State then pointed out, last year the credit unions had a mortgage book of approximately €260 million, which is a figure that has grown 26% year on year. This is to be welcomed but it is a drop in the ocean when one appreciates that mortgage drawdowns hit €10.5 billion last year, and 2021 had the highest volume of mortgages granted since 2009 and the highest mortgage values since 2008. All of that shows that more work needs to be done.

I understand that the Minister of State told Senator Boyhan that he would meet representatives of the Irish League of Credit Unions and that legislation would come before the House in due time. I hope that the legislation will be developed with input from the ILCU as well as the Central Bank. I also hope that the Department of Finance will engage with all other stakeholders in a timely manner.

More broadly, the role of credit unions in community banking can see development outside of the mortgage market. A credit union can often provide a much more personal touch as it is staffed by locals from the community. Such a situation can be of great value whether to the people who are marginalised, vulnerable or less comfortable in a formal banking situation.Additionally, credit unions offer an accessible line of credit for people with limited means. They can use credit unions for small deposits and withdrawals, allowing them to save what they have and get a loan if needs be. It allows individuals to have control over their finances that they otherwise might not have through a traditional bank. I would like to see credit unions become hubs for their communities to help people with their finances. They should be allowed to develop their financial support mechanisms. An area of research and development which will serve to future-proof credit unions is in digital currency. The decentralised aspect of digital currencies will allow further autonomy for personal finances and empower each individual to save, borrow and spend as they see fit.

The role the credit union has with regard to the marginalised is very important. We do not want to see our credit unions turning into what we now know as our banks. People who are marginalised, and those who may suffer from domestic abuse or be living in coercive relationships, may not have access to their own funding. It is very important that we make it as easy as possible for these people to be able to lodge what they can when they can without too much red tape. Credit unions throughout the country make a wonderful contribution to our economy. I would like to see more credit unions having access to ATMs in towns where banks have closed down.