Eugene Murphy (Fianna Fail) | Oireachtas source

I welcome the Minister of State. I am delighted to make a short contribution to the debate. I commend him on the excellent work he has done in this area. His series of meetings and engagements to move this matter forward is recognised by the credit union movement. I have been asked to pass that on to him. I acknowledge the work done by the current Minister for Public Expenditure and Reform when in opposition. He made a major contribution to moving this on.

It is important that we commit to strengthening the credit union sector. The institutions, which are not for profit and member-owned, are trusted and relied upon by communities up and down the country. The heavy regulations and low interest rate environment have put the credit union model under severe pressure, so reform is needed. It is vital that we review the policy framework concerning how the credit unions operate.

I am aware that we have pledged to enable and support the credit union movement to grow, expand its services and encourage community development. Recognition of the importance of credit unions is embedded in government, with dedicated ministerial responsibility for the first time. The Minister of State’s role in this regard has been significant.

We want credit unions to grow their lending. They have substantial deposits and investments but it is important that they increase their lending because this is how they will become sustainable. Legislative or regulatory amendments alone will not solve the financial challenges arising from the low or negative interest rate environment, muted credit demand, strong savings growth and high operating costs. To address these issues, credit units must develop their models and enhance collaboration.

We, as members of Government parties, recognise the importance of credit unions. The programme for Government contains commitments to review the policy framework within which credit unions operate and enable the credit union movement to grow. That is precisely what we are doing. We are almost at the final stages of this process, which is very welcome. The programme for Government gives a clear commitment to supporting the credit unions in the expansion of services to encourage community development.

In this regard, we have seen what has happened with the pillar banks. Huge swathes of society have been left without a banking service. I have referred to north-east Roscommon, where up to 10,000 people no longer have a local bank. The pillar banks have closed one by one, and there is more to come. Let us be clear: more pillar banks will close branches up and down the country. It is imperative that the next step we take politically be the right one for the credit unions, namely the step we have committed to in the programme for Government, which is to enable the credit union movement to grow as a key provider of community banking. A policy review that manages the status quo but fails to move on and provide another community-based platform for financial services will be a lost opportunity. I have no doubt that there are good initiatives coming down the road and no doubt about the Minister of State’s commitment, but it is important not to put this on the long finger. We need to get this through the system as quickly as possible and to have community banking put in place as quickly as possible.

I will leave it at that. I am delighted that the Minister of State is present and about his commitment. The credit union movement has a network of buildings and staff on the ground; now we need to deal with the legislative situation and ensure we allow the credit unions to become full community banks.