Michael Moynihan (Cork North West, Fianna Fail)
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35. To ask the Minister for Finance the engagement he has undertaken as part of the policy review for credit unions. [9308/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Since June 2021, Minister of State Fleming, who has responsibility for credit unions, has held 26 meetings with various credit union stakeholders including;

- the Representative Bodies;

- various collaborative ventures;

- the Registrar of Credit Unions;

- the Credit Union Advisory Committee and

- individual credit unions

These meetings have proven to be very informative and their outputs have fed into the Review of the Credit Union Policy Framework.

Separately, Department Officials from the Credit Union Policy Team have very regular engagement with sector stakeholders, including quarterly stakeholder roundtables, the next of which will take place before the end of February.

They also act as secretariat to the Credit Union Advisory Committee, which meets on a monthly basis.

Jackie Cahill (Tipperary, Fianna Fail)
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36. To ask the Minister for Finance the status of the publication of the credit union policy review framework. [9441/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Work on the Review of the Policy Framework is well advanced and we intend to issue proposals emanating from the Review for consultation shortly.

As part of the Review of the Policy Framework, Minister of State Fleming has conducted extensive stakeholder engagement, meeting with the representative bodies, collaborative ventures, service providers, the Credit Union Advisory Committee, the Registrar of Credit Unions and individual credit unions. The information gained from these meetings will help inform the next steps taken by Government.

In terms of supporting the sector to provide essential financial services to local communities, the following are some recent developments which highlight the potential of the sector to grow and fulfil a role in relation to community banking.

Lending and Investment

The Central Bank has in recent years reviewed both the lending and investment frameworks. Since 1 January 2020, credit unions now have a combined capacity to provide up to €1.1 billion in additional SME and mortgage loans, with further capacity available to credit unions who can comply with certain conditions or on approval by the Central Bank. As of September 2021, credit unions had a combined mortgage and SME loan book of circa €387 million, an increase of 19% year-on-year.

Credit unions are permitted to place their surplus funds that have not been lent to members in a range of investments including Tier 3 Approved Housing Bodies (AHBs). I am pleased to share with the Deputy that three credit union backed funds have received approval from the Central Bank. Credit unions will be able to invest up to €900 million in these regulated funds, which will subsequently lend to AHBs.

SME Lending

Nineteen credit unions were approved in early 2021 for participation in the Covid-19 Credit Guarantee Scheme. Further, in November five credit unions were announced as participants in the Brexit Impact Loan Scheme (BILS). The BILS provides low-cost loans of €25,000 to €1.5m to eligible Brexit-impacted businesses.

In total, SME lending has grown 6.9% year on year to end September 2021. Further development of SME lending in a controlled manner could also assist credit unions in growing and diversifying their loan book.

Access to Finance for Retrofit

The Government significantly increased the funding available to support retrofit. My officials have been engaging with stakeholders to support increased credit union participation in retrofit loan schemes.

Other Services

Other than member savings and lending, in order to provide “additional services”, a credit union must receive approval from the Central Bank.

66 credit unions are approved to provide current accounts.

The Central Bank has prescribed a list of exempt services which may be provided without requiring approval. The Central Bank is undertaking a review of the Exempt Services Schedule to ensure that the services listed reflect the current financial services landscape. The Central Bank has commenced a public consultation seeking views from stakeholders on the proposed changes arising from this review.