Fianna Fáil Finance spokesperson Michael McGrath has described this week’s Dáil debate on the future of credit unions as a vital opportunity to ensure that the sector can operate on a level playing pitch against the interests of the big banks.
Deputy McGrath commented “As banks close branches and restrict in-branch services, credit unions provide important competition and choice to consumers. In many parts of the country they are now the only local provider of financial services. However, credit unions are about to be hit by a wave of new restrictions on their activities before the end of the year. The only beneficiary of these changes will be the banks.
“The most serious of these regulations is the impending cap on savings. This is an unnecessary limitation on customer choice. It will send out the signal that credit unions are less safe than competitor financial institutions.
“Fianna Fáil has put down this motion to give the Dáil the opportunity to force the Minister for Finance to press the pause button on these new regulations which threaten the ability of credit unions to compete with the banks. It is our view that a working group involving representatives of the industry should be initiated immediately to examine the appropriateness of the regulatory structure. No further red tape should be imposed on credit unions until such time as this happens.
“These regulatory measures were conceived at a time when the Government was convinced that significant funds would be required to support and resolve the sector. However, a prediction by Minister Noonan that there would be a cost of up to €1billion to support the credit union sector has proven entirely inaccurate. The proposed regulatory measures can no longer be considered fit for purpose. The Minister needs to go back to the drawing board on this issue.
“It is particularly concerning that the Labour party have been complicit in supporting a Fine Gael policy which is directly contradictory to the interests of 2.5 million credit union members. Public representatives have a responsibility to protect the interests of credit unions and today’s debate offers Labour TDs the opportunity to stand up and be counted.
“This is a vital moment in the history of credit unions in Ireland. The members have spoken loudly to their public representatives that they want their credit unions nurtured and supported. It is imperative that the Minister for Finance listens to this and calls a halt to imposing another layer of bureaucracy on credit unions.”