Fianna Fáil Spokesperson for Finance Michael McGrath has said Minister Noonan must make good on the pledge made in the Framework Agreement between their respective parties to support the growth and development of the credit union sector.
New figures provided to Deputy McGrath indicate that the Credit Union Restructuring Board (ReBo) expects to have fully completed its work by the end of the year using just €20 million of the €250 million set aside into the Credit Union Fund for the purposes of restructuring.
In addition, the Resolution Fund for credit unions in imminent financial distress has been utilised on just a handful of occasions with its costs substantially offset by income it generates. Overall the cost of supporting the sector has been just a fraction of the potential amount of €1 billion spoken of by Minister Noonan in 2011.
According to a parliamentary reply received by Deputy McGrath as of the end of April 41 merger projects involving 91 credit unions, have been completed with a further 9 projects involving 22 credit unions set to complete shortly. An additional 106 credit unions will be assisted in completing their mergers during the course of 2016.
Deputy McGrath commented, “Fianna Fáil championed the cause of credit unions in the last Dáil. We were the only party to recognise the proud tradition that credit unions have in communities throughout the country. As banks close branches and restrict in-branch services, credit unions provide important competition and choice to consumers.
“Our Dáil motions put a spotlight on the sector and resulted in a reassessment by the Department of Finance and the Central Bank of the regulations that are holding back the sector. We will continue this approach in the new Dáil scenario and ensure the Minister for Finance makes good on his pledge.
“There are a number of practical measures which we believe will form the basis of a reinvigorated credit union sector. These include:
– Lifting the €100,000 savings cap on credit unions;
– Implement a tiered regulatory approach;
– Support the roll out of new products;
– Ease restrictions on long term lending;
– Extend the role of the Credit Union advisory committee.
“In particular there is an urgent need for credit unions to be facilitated in upgrading their IT infrastructure that provides connectivity between all credit unions, giving credit union members a network, wherever they are located. Given that ReBo will only use a fraction of the funds provided to it there is a case for allocating some of these unused funds to invest in the necessary technology.
“Credit Unions can also play a vital role in tackling the need for housing in the country. The sector has been developing proposals which would see it partnering with Approved Housing Bodies to improve the supply of social and affordable housing. Credit unions should be fully supported in their efforts in this regard,” concluded Deputy McGrath.