Gerald Nash (Louth, Labour)
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200. To ask the Minister for Finance his plans to enable and support the credit union movement to grow as outlined in the programme for Government; the way in which he plans to help credit unions deliver an expanded range of community banking services; and if he will make a statement on the matter. [14596/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Government welcomes the important work credit unions are doing to support communities throughout Ireland at this difficult time and recognises the key role that credit unions play in the delivery of financial services in local communities across Ireland, the need for which is heightened at this time. Credit unions account for approximately one third of the consumer credit market and are well positioned to provide access to credit to support the recovery from the current crisis.

The economic outlook arising by virtue of COVID-19, including reduced demand for new lending, has increased the challenges the sector is already facing. As a result it was agreed that the CUAC would report to me on challenges and opportunities for the sector, incorporating implications of COVID-19, the role credit unions could play in the economic recovery and any relevant recommendations. I understand that this report is almost complete and will be submitted to me in the coming days.

There are several commitments in Programme for Government which relate to credit unions, which will be expanded upon in the coming weeks and months as the new Government beds down, taking into account work already completed such as the CUAC report noted above and a separate CUAC report on directors finalised in February 2020.

But credit unions do already have the ability to deliver an expanded range of community banking services. Credit unions could further grow their consumer lending, mortgage and SME lending, expand the range of products and services they provide their members and further embed digitisation, either individually or through collaborative efforts.

Following recent revisions to Central Bank lending regulations the sector currently has capacity to lend an additional €1.1 billion for mortgage and SME lending collectively, with additional lending capacity available to credit unions which can comply with certain conditions or on approval by the Central Bank. As at end 2019 credit unions had a mortgage and SME loan book of approximately €300 million.

There are also positive examples of credit unions providing new services. To date, 53 credit unions have been approved by the Central Bank to provide current accounts with debit cards, overdrafts and a range of payment services to their members. This has been rolled out in approximately 35 credit unions so far.

I and my officials will continue to engage constructively to assist credit unions in delivering new services to their members.