Dáil Éireann Debate, Thursday - 30 March 2017
145. Deputy Michael McGrath asked the Minister for Finance his views on reports that a State owned bank expects to increase its share of the personal lending market by specifically targeting the business of credit unions in view of the regulatory curtailment in 2011; his further views on whether the actions of the bank is placing the credit unions at a disadvantage; and if he will make a statement on the matter. [15972/17]
View answerAs the Deputy is aware, notwithstanding the State's various shareholdings in the banking sector, the strategic and commercial direction taken by each bank is solely the responsibility of the management team and board of that institution. I have no role in their strategic decision making or indeed day to day operations.
The average Credit Union sector loan to asset ratio is currently c.27% reflecting low loan to asset ratios for the majority of credit unions, including those that do not have lending restrictions imposed by the Central Bank of Ireland.
The Central Bank has informed me that lending restrictions are imposed in the context of on-going matters of supervisory concern arising in individual credit unions. Currently c.24% of Credit Unions are operating under lending restrictions. For those credit unions where there is an individual loan size restriction in place, the level at which the limit is imposed ensures that the vast majority of those credit unions can continue to make loans significantly more than the average loan for the sector of just above €6,000. The Central Bank has advised me that that the Registry of Credit Unions has carefully calibrated the use of this regulatory tool to mitigate risk while also recognising the core business of credit unions to lend to their members
I have said before that open market competition between prudent, commercial lenders represents the best method of driving better rates, offers and choice in financial services for customers.
