Niall Ó Donnghaile (Sinn Fein) | Oireachtas source

Cuirim fáilte roimh an Aire Stáit agus cuirim fáilte chomh mhaith roimh an reachtaíocht atá os ár gcomhair anocht. It is important to begin, as Senator Maria Byrne did, by acknowledging how important the credit union is in the fabric of Irish life and how it permeates across all parishes, communities, cities and counties. While listening to Senator Maria Byrne, I thought back to my late grandmother, my granny McVeigh, who said to me as a young fellow, “Make sure you join a credit union, son. Get into the credit union”. I am sure that is reflective of many people’s experiences. Certainly, when I got to the age of 18, when I finished school and when I wanted to go on my first foreign holiday, I was glad that I was a member of the credit union because it enabled me to go.

There are over 300 credit unions across Ireland, North and South. One in two people in Ireland have a credit union account. It is a movement that is considerate of the needs of a community, it generally places people above profits, and it seeks to benefit its members, not shareholders. Credit unions are trusted, they are visible and they understand what makes and strengthens community. Irish people really depend on their local credit union, not least at this time of the year, and they are so popular because they treat their customers and members with respect, always trying to respond to their needs and circumstances.

The Credit Union (Amendment) Bill is welcome because it comes at a time when Ulster Bank and KBC are closing their doors. Other banks are whittling down their services and providing machines instead of fully functioning branches. Commercial banks during the pandemic used the public health restrictions as an opportunity to close many branches across the country, negatively impacting customers and communities that are remote, that lack decent access to broadband or that require assistance in adapting to digital services.

Credit unions, in stark contrast, have remained accessible, responsive and adaptive. This Bill is the first substantive credit union legislation since 2012, which followed the Commission on Credit Unions. In the recognition of the importance of the role of credit unions, the Bill includes an additional object into section 6 of the principal Act, namely, "to promote and provide support to co-operative groups and voluntary associations". Currently, there is no recognition of or reference to the volunteer ethos of credit unions in the Act, so this is particularly welcome.

In terms of what the Bill does, this Bill makes it possible to support investment in collaboration, through the creation of corporate credit unions. It will also amend section 43 to clarify that credit unions can invest in ventures supporting credit unions. This enhanced collaboration is vital for the future of the credit union movement. It will allow credit unions to better serve their members by increasing the range of services offered. Corporate credit unions allow for an additional regulated structure through which credit unions could collaborate. The Bill seeks to improve members' services by allowing credit unions to refer members to other credit unions and to participate in loans of other credit unions. At the moment, whether a member can access the fullest range of services depends on what his or her local credit union does or does not provide, and members cannot just go to a different credit union to access other services. You can only be a member of the credit union in your local area. If a member's local credit union does not provide a current account or mortgage lending, he or she cannot join a credit union that does, nor can the credit union introduce the member to another credit union, though it can introduce a member to a bank or non-bank. It is therefore great to see that the amendments in this Bill aim to increase the flexibility of the common bond and to allow for practical improvements to help credit unions increase competitiveness and to deliver a greater range of services to more members. We must empower credit unions to be more competitive in an environment of aggressive competition from banks and newer actors in the market, such as Revolut, PayPal and Starling, amongst others.

The Bill will also amend section 38 to allow the Minister for Finance to set a maximum interest rate, which is currently fixed at 1% per month. The Irish League Of Credit Unions, ILCU, has been calling for the introduction of a significantly reduced statutory maximum interest rate. This is important to help to prevent situations where the high cost of borrowing often results in unmanageable debts for vulnerable people and families.

The Consumer Credit (Amendment) Act is also important legislation which sets out a number of significant regulations in this regard. There are also measures to support enhanced governance of their boards to ensure it is in line with best practice in corporate governance. The Bill has the full support of the Irish League of Credit Unions. I know that they have been campaigning for legislative changes since 2016, so getting the legislation swiftly through the Oireachtas would be something I am sure they would appreciate as well. Indeed, the need for reforms in this area have been long awaited and the Government has been quite slow to react to calls for these reforms.

The final report of the credit union advisory committee implementation group was published in January 2019. I think people would have liked to see a quicker response but it is welcome that we now have some movement and the Bill before us this evening. We will look at it in more detail on Committee Stage but Sinn Féin broadly supports this Bill and we hope that it will move swiftly through the legislative process in order to give effect and to make a difference to credit unions and to communities they are a part of.