That leave be granted to introduce a Bill entitled an Act to amend the Credit Union and Co-operation with Overseas Regulators Act 2012 to make provision for the establishment of an independent appeals mechanism to enable Credit Unions to appeal decisions of the Central Bank on regulatory decisions and to provide for related matters.
I am pleased to have the opportunity of introducing the Credit Union (Amendment) Bill 2019. As all Members of the House will know, credit unions have existed in Ireland and served communities for over 50 years offering a crucial service in towns and villages throughout the country. They offer a viable and local alternative to the main retail banks. Credit unions are owned by their members, are supported by volunteers and are underpinned by the common bond.
Over the past number of years credit unions have faced very significant challenges. The other credit union Bill we will be discussing later today or tomorrow seeks to dissolve the Credit Union Restructuring Board or ReBo. Over its lifetime there have been 82 restructuring projects involving 156 credit unions across 24 counties. As a result, the number of credit unions has dropped by one third in its lifetime. This trend, if it continues, will result in credit unions playing a diminished role in local communities. We cannot allow this to happen.
It is simply too difficult for many credit unions, either by themselves or collectively, to lend money on longer and more viable terms. It is estimated that credit unions collectively have over €8 billion held in investments and the return on these investments is insignificant. Some credit unions are now refusing deposits because it is costing them too much to hold those deposits.
Fianna Fáil has long been calling for the credit union movement to be used to assist in the building of social and affordable housing. While the Central Bank has changed the rules to permit that, the Government has not made any move to make this a reality in practice.
Fianna Fáil has been calling for the credit union movement to be allowed to enter the mortgage market in a more substantial way. This would increase the revenue for credit unions and it would add much-needed competition in the mortgage market and potentially push down mortgage rates which are among the highest in Europe.
The purpose of this Bill is to provide an appeal mechanism for credit unions or groups of credit unions against regulatory decisions. This would better enable credit unions to appeal decisions made by their regulator in the Central Bank, known as the registrar for credit unions. This Bill proposes to establish a credit union appeals committee. This committee would direct the registrar of the Irish Financial Services Appeals Tribunal in cases where the complainant was a credit union or group of credit unions.
This Bill will remove the restrictions and state that any decision made by the Central Bank is an appealable one when it relates to credit unions. I look forward in due course to introducing the detail of the Bill.