Thomas Pringle (Donegal, Independent)
Link to this: Individually | In context | Oireachtas source

250. To ask the Minister for Finance if he will establish a policy taskforce which was requested by an organisation (details supplied) to enable the delivery of the programme for Government commitment to enable the credit union movement to grow as a key provider of community banking in the country; and if he will make a statement on the matter. [14410/22]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

259. To ask the Minister for Finance if he will consider the issues raised in correspondence by an organisation (details supplied); and if he will make a statement on the matter. [14428/22]

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

260. To ask the Minister for Finance if he will review correspondence (details supplied); if he will address the issue; and if he will make a statement on the matter. [14453/22]

Michael Lowry (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

268. To ask the Minister for Finance when he will honour a commitment in the programme for Government to enable the credit union movement to grow as a key provider of community banking in the country (details supplied); and if he will make a statement on the matter. [14681/22]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 250, 259, 260 and 268 together.

This Government recognises the importance of credit unions. The Programme for Government contains commitments to:

- Review the policy framework within which Credit Unions operate;

- Enable and support the Credit Union movement to grow; and

- Support Credit Unions in the expansion of services, to encourage community development.

With regard to fulfilling the commitments in the Programme for Government for credit unions, the Review of the Policy Framework is in its final stages following a recent engagement session with all the credit union representative bodies on the emerging proposals.

Legislative proposals arising will go to Cabinet shortly. The proposals being considered aim to better position credit unions to grow as a key provider of community banking.

In developing these proposals, Minister of State Fleming 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). 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).

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. 

68 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.