Dáil Éireann díospóireacht -
Wednesday, 1 Mar 2023

Vol. 1034 No. 4

Credit Union (Amendment) Bill 2022 [Seanad]: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

Deputy Richard Boyd Barrett

I welcome the opportunity to speak to the Bill. Anything that helps develop and supports the credit union movement should be welcomed. The credit union movement is unusual among financial institutions internationally, although not unique, in that it offers a not-for-profit model that is democratic and community orientated and has social and community objectives rather than objectives of simply maximising profit, which is the raison d'être of banks.

We are grimly familiar with where the profit imperative that dominates the banking system led us, not least in the aftermath of the crash of 2008 and all the circumstances that led up to it. The rapacious, relentless greed of banks tipped our entire economy over the edge and inflicted great suffering on vast numbers of our people, and there was no reason for that other than that the banking system ran on a for-profit basis. It had no social objectives or imperatives. It was just about making money, whereas the credit union movement is very different and was set up precisely to break the mould of that model of financial institution, to have social and community objectives, to be democratic and to assist people who are not really of interest to big banks.

The sort of for-profit culture that led to the crash of 2008 and the disregard for ordinary customers of financial institutions are not, sadly, a thing of the past despite a lot of talk after the crash of reform of the banking sector. While there was some reform in terms of capital requirements and so on, in reality, the banking system has not changed. Perhaps the most egregious recent example of that was the departure of Ulster Bank, where in the region of 1 million customers were dumped by a bank even though many of them had been loyal customers all their lives and even for generations. They were dumped unceremoniously by a bank that did not care about the loyalty the customers had given to it because banks make commercial decisions and that is it. If that discommoded, as it has done, up to 1 million people, "tough luck" seemed to be the attitude of Ulster Bank.

That is a very different culture from that of credit unions, which are community-based organisations trying to assist ordinary people with their finances and lives. Broadly speaking, therefore, we welcome the Bill. I was more familiar with many of the issues involved when I was a member of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach for a number of years. I was aware of groups such as the Irish League of Credit Unions, ILCU, which is broadly supportive of the Bill, arguing precisely that the Government should do more to support credit unions and to recognise their unique qualities. One thing that always struck me, and I raised this on their behalf when I was a member of the finance committee, was their offer to use their considerable assets to assist with social housing delivery. They have been saying that for many years. I do not know exactly what the progress of it is but-----

Minister of State at the Department of Finance (Deputy Jennifer Carroll MacNeill)

I could update the Deputy on that.

Deputy Richard Boyd Barrett

To be honest, successive Governments seem to have been very slow in taking them up on an important offer. I appreciate there is a bit more money in the Government coffers at the moment but it still seems odd that credit unions were often forced, or at least that was the story they relayed to me, to deposit their money with commercial banks when they would very much rather have invested in things that were beneficial to society, namely, housing and other important infrastructure or services that could benefit society. If the Minister of State is signalling that the Government is looking positively on those sorts of calls from the credit union movement, that is good.

Deputy Jennifer Carroll MacNeill

I can update the Deputy. The opportunity was to provide funding of €900 million for the approved housing bodies, AHBs, and that has been there since 2018 or 2019. I believe less than €20 million of that has been utilised by the credit union movement. The opportunity has been there for some time but has not, unfortunately, been fully utilised. We would hope to see more of it being done.

Deputy Richard Boyd Barrett

Okay. I certainly hope it will be done and I do not know all the details as to why it has not been fully utilised. Perhaps that is a question to put out there, but the Irish League of Credit Unions was clear in making the case a number of years ago, when I was a member of the finance committee, that credit unions wanted to assist in addressing the housing crisis.

The Bill includes a provision to set maximum interest rates for loans. That seems reasonable on the face of it, but I wonder why we do not take similar measures to deal with the rampant profiteering of commercial banks when it comes to interest rates at the moment, where commercial banks in this country are charging roughly 1% more on average in interest than is the case in the rest of Europe. People, particularly at the moment, are being hammered with increased mortgage interest costs, significantly exacerbating the cost-of-living crisis many people are facing, and the Government is not really doing anything about that profiteering by the commercial banks.

Our view is that we should nationalise the banking system and run the entire banking system on a not-for-profit basis because banks caused the disaster that was the 2008 crash and have shown, and continue to show in all sorts of ways, that they do not have the best interests of their own customers and society at heart but are really interested purely in profiteering. When I say that, however, I am not suggesting that, therefore, credit unions themselves should become an alternative banking system because I do not think that is what they or their members want, nor do I think it would be a good thing given they have a unique ethos that needs to be maintained. Nevertheless, it is important for them to be a good alternative to the commercial banking system and to be supported to evolve and develop the services they make available to their members or people who want to join the credit union movement.

There are obviously some concerns that we might push them to become like banks. It is important to sound a warning note to say that is not the direction we want them to go. If the changes and the policy framework we are developing around the credit unions are to enhance the services they are able to make available to communities and their members, that is very much to the good but we do not want to jeopardise the unique ethos of the credit unions as community institutions. When you go looking for a loan from people you know in your community, you have a democratic system governing the entire process as opposed to what you get when you go to the banks, where increasingly you do not have anyone to talk to these days. Your application will be sent up to a credit committee somewhere which will make a decision that is not based on any relationship it has with you as a human being and an individual. As a consequence, you will often be treated very unfairly. What is good about the credit unions is precisely that human interaction at the grassroots level between the institution you are going to in search of assistance, in the form of credit, and the real human beings in the institution who know you and understand your story and particular needs.

We support the Bill. I hope the Minister of State will look favourably on the amendments. The ILCU has said that amendments are needed on Committee Stage. I hope the Minister of State will look favourably at them because the ILCU is the expert on all of this. I hope she bears in mind that we need to protect that unique not-for-profit and democratic ethos of the credit unions, while supporting them to evolve and develop what they can offer to their members.

Deputy Cathal Crowe

Like others here, I welcome this very important legislation. Credit unions are the bedrock of all communities. I am still a member of the Irish National Teachers Organisation credit union, Comhar Linn. I would love to have got more money off it over the years but I suppose that is the way that credit unions work. They are fantastic. What credit unions can provide in moneylending facilities to any workplace or community is incredible. This legislation further enhances the governance structures of the credit union system and it enhances communities as well.

Last week I was invited to visit the Money Advice & Budgeting Service, MABS, facility in Ennis. It was my first time in the facility. I know that on a weekly basis it advises a huge number of people, currently around 140, who are in arrears with their mortgages and struggling. Each MABS office has a dedicated mortgage adviser, DMA. This is a really skilled person who gets the legalities, understands the whole realm of financial advice and knows how best to position someone who is in difficulty. There is also a very strong social dimension. They often sit across the desk from someone who is breaking down in tears as they watch their financial life crumbling. They give them the best possible advice. They very often steer these people beyond the repossession and court routes into a more friendly way of managing debt and so on. The problem is that the DMAs do not have permanent positions. Most of them are on roll-over contracts. The funding model that supports them expires at the end of November. Strictly speaking, this comes under the remit of the Minister for Social Protection. Nonetheless, I am asking the Minister of State, who is new in her role and in whom we put great value, to advocate for these people. It is not just those who struggle financially who benefit from their work. The courts system also really values the work of MABS and the DMAs in keeping the whole system unclogged and in dealing with people as people and not as someone in the dock in court talking about their financial woes. This is something in which we should invest more.

Finally, I pay tribute to an incredible guy from County Clare who has probably interacted with most Members of this House at one stage or another. His name is Tom O’Callaghan. He recently became a county councillor by virtue of co-option. Councillor O’Callaghan has been leading a crusade to transform and revolutionise our post office network and in particular to save rural post offices that are struggling. He has made a suggestion, which I have heard permeate into the debate of his House in recent weeks, that we would look at other forms of banking including the Kiwibank and Sparkasse banking systems. These are incredible banking models. Like the credit unions, they are rooted in the community. Profits are reinvested and the community is the main stakeholder in the bank. Previous Ministers for Finance have looked at this approach and while it has been warmly received, it has never even got onto the starting blocks. Strictly speaking, it is not part of today’s legislation but these debates allow us to broaden some of the discussions here. I want to put it on the Minister of State’s radar. It might be something she can champion or at least ask the officials in her Department to take a fresh look at. Tom O’Callaghan has been touting it for years and the idea has become a little more mainstream. We can see the successes of Kiwibank and Sparkasse. I think that kind of model can work in a country like Ireland which is small and very much community based when you get outside the capital and other cities. It is the kind of model that can work really well. I ask the Minister of State to keep up the good work.

Deputy Paul McAuliffe

I welcome that the Minister of State has brought the Bill before the House. I am sure she would acknowledge the work of her predecessor, the Minister of State, Deputy Fleming, in preparing this Bill.

Deputy Jennifer Carroll MacNeill

Absolutely.

Deputy Paul McAuliffe

It is an example of how we are trying to work with the credit union movement to try to improve on what everyone in the House agrees is an important and essential service.

We have to remember where the credit union came from. It came from communities where there may not have been a lot of money. It was a way of avoiding people having to turn to moneylenders who were known to knock on the door and take advantage of people who had very little by charging a penal interest rate. Deputy Crowe spoke about the Sparkasse model which, in many ways, developed from the same idea of having a sense of community in banking. The credit union is our community bank. It is essential but it will face different challenges from those it faced in the last century. This Bill is about readying the credit union movement for the century to come. There will be significant changes ahead. I think app-based banking will significantly change the consumer experience. It is not something that people of all levels of digital literacy will be able to avail of. I am thinking of An Post and of the many communities where the banks are pulling out. An Post Money, which is An Post's new app-based bank, is able to connect with the massive network of post offices which are located not just in every town in the country but in every parish. It enables one to avail of many of the benefits of a bank account using the app-based model, as well as the benefits of that local network. It is an idea that the credit unions can build on and this Bill allows them to do that.

The changes to governance are very beneficial. I would caution that there have been cases in which credit unions have been the victim of financial impropriety by the most senior people in their branches. There could be a person with a gambling addiction and there could be financial fraud and so on. We must ensure the community oversight aspect of governance is still there and is not a burden on the running of the business. Protections must be in place so that the community’s savings are safe and not prey to any one particular person who might have problems.

I looked at the numbers and they are staggering. Credit unions have €17 billion in savings, €5.5 billion in loans and 3.5 million members. They reach into every part of the community.

The improvements to services that members will see as a result of this legislation are very positive. I spoke about credit unions in general. In my own area we have Finglas Credit Union, the Progressive Credit Union and Larkhill Credit Union. Ballymun and Ballygall credit unions have recently merged. Many of them do great work. It would be a pleasure to have the Minister of State out to the constituency to see some of that work and to meet with them to discuss the concerns they have with this legislation and also other issues in the community too.

Deputy Martin Browne

I hope the Minister of State enjoyed her visit to Tipperary and especially Cashel a couple of weeks ago. I saw her going into Walsh’s butchers before she left town and I hope she got something nice there.

I am pleased to speak on this Bill today. In my area, just like in many communities across the country, the value of credit unions cannot be overstated.

The purpose behind enabling the credit union movement to grow is worthy, and this Bill seeks to begin to deliver on that to an extent. In recent times, we have seen the withdrawal from Ireland of a number of banks, including KBC Bank and Ulster Bank. Before the exit of these banks, it was important to have credit unions that were enabled to provide for the needs of their customers. This has never been more important owing to the co-operative and voluntary ethos that has worked so well for credit unions and the community for years. That ethos, I am glad to say, is expressed within this Bill, especially in section 6, where provision is made to promote and provide support to co-operative groups and voluntary associations. Given that there is no reference in the current Act to the volunteer ethos of credit unions, this is welcome. It is welcome not just because it recognises the ethos but also because it serves to perpetuate it.

At the heart of each credit union are its members, and at the core of the membership are individuals, each with different means, needs and aspirations. Therefore, it is good to see that provision is made to enable credit unions to invest in credit union service organisations to increase the range of services they offer their members. This is progression for the customer. I welcome the inclusion of enhanced collaboration that will allow credit unions to invest within the services structure and get the supports that would enable them to improve the range of services that branches can provide to members. Commitment to members is a feature of credit unions that we must ensure remains alive and strong.

We saw how banks took the pandemic as an opportunity to reduce their services. We had the attempted withdrawal of ATMs. These days, we see how many banks lack the personal touch. To speak to a member of staff is now seen as unusual in the average commercial bank. We cannot allow that to seep into the credit union movement. Thankfully, this Bill also focuses on improving member services such that where a certain credit union cannot provide a service, a member may go to another that does and avail of it. This enhances competitiveness and expands the range of services available to members. This is to be welcomed.

Ahead of today's discussion, Members received correspondence from the ILCU, which is supportive of this Bill. In that letter, it states credit unions are not simply an alternative to banks but a model of community banking that can deliver a much wider range of services and an alternative financial platform. I acknowledge that and support credit unions regarding this valued set of principles.

Deputy Seán Canney

This is the first time I have had an opportunity to speak to the Minister of State since she assumed her role. I wish her all the best with it. She is taking on a very important portfolio. It is important that we work together within the House. The legislation she is introducing is to be welcomed. I concur with the remarks about her predecessor as Minister of State responsible for this area, Deputy Fleming, who did a lot of the spadework.

We all know about the credit union movement. We know how it was founded and how it developed. It involves genuine community banking. We talk about banking systems in other countries but we have real community banking here; we just do not have the legislation to take the next step in developing it so it will be of more benefit to people and communities.

At the heart of all of this is the fact that the money of the credit unions is their members' money. Therefore, they have to look after it. They do a great job in minding it and making sure it is invested properly to benefit communities and protect those saving for retirement or another purpose.

We have had some cases of things going wrong in particular credit unions. We will always have these but they have been blown out of all proportion, as is evident from the large number of good credit unions we have had throughout good and bad times. I acknowledge the staff of the credit unions in my constituency, in Tuam, Loughrea and Athenry. They have been working tirelessly, especially in the downturn, to try to help people as best they can.

Let me refer to something that sticks in my craw. During the downturn, loans that were being defaulted on were sold off to other institutions, which are making hay out of them. Many people, including couples and families, get letters monthly threatening them with eviction from their homes. The amount they owe is going up even though they are making repayments. It is time that the Government stepped in to get rid of this type of filth in our society, whereby people are making a profit on the hardship of hardworking families. I have a case involving a couple whose mortgage liability is rising month on month although they are paying up to €800 per month. They are working hand to mouth to try to feed the institutions. This is wrong. We pride ourselves on being a rich, developed country with a considerable tax surplus year in, year out, yet we have people who are actually suffering and getting no help from the State to get rid of the vultures. It is the real vultures who have bought the loans. They do not care if they never sort it out because they are getting money every month from people who are working hard without finalising any deals with them.

The funds will not engage with the mortgage holders. One has to go through a customer service person, who states proposals must be submitted in writing. Six months later, the company states its committee has decided not to entertain the offer. That is all that is in the correspondence and the mortgage holder must try again. Every three months, one is sent a form to be filled out to state if one's circumstances have changed. It is the worst form of money grabbing by sharks who are effectively recognised and legalised in this country. It is wrong. This is a pet subject of mine.

When we examine the Bill and the credit unions, we see there is great potential. The Minister of State knows that. With all the grants being given for the deep retrofitting of housing, for example, and with farmers getting grants through the Common Agricultural Policy and the agri-climate rural environment scheme, there are opportunities for credit unions. They want to get involved in becoming the relevant agencies or one-stop shops so they can facilitate people with advice and loans and by ensuring the jobs being done are not a rip-off.

We have an opportunity but we need to put schemes in place on a national basis to support the grants. Within this legislation, which the Minister of State will agree is a first step in making sure we give powers to the credit unions to expand, we need to examine how best additional powers can be given to them to provide more money in an easy way to those improving their homes for building energy ratings, changing their heating systems and so on. It is important that we recognise this Bill is a first step.

I would never like to see the credit unions going the same road as the banks, whereby they get to a stage where they become bigger than their communities or believe they can do something like the banks have done and start closing branches. The banks are trying to remove themselves from the public and do everything online. We all know that, even in this day and age, there are many people without the computer literacy to deal with online banking and so on. The credit union is their saver, as is the post office.

Credit unions are assets in the sense of being service providers, including in the community. I welcome this legislation but it needs to be amended. The ILCU has set that out. The Minister of State said in her opening remarks yesterday that she will table amendments to this legislation. We look forward to seeing them and to continuing to work with her. Again, I wish her well in her role.

Deputy Christopher O'Sullivan

I join others in congratulating the Minister of State. I have always admired her contributions in the Dáil Chamber, especially those on violence against women. She has done incredible work in that regard. I congratulate her on her elevation and look forward to working with her, particularly in the area of insurance and the difficulty communities and charity organisations have in obtaining it. I will not get into that today because we are talking about credit unions.

I welcome the Bill, especially because it will lead to an expansion of services and the encouragement of further investment and development within communities.

It will lead to a situation where we encourage further investment in the community and further development within communities. That absolutely has to be welcomed. Since 2020 when this Dáil was elected, this has been a recurring theme in terms of looking for a greater role for credit unions in banking and investment within the community.

As Deputy Canney mentioned, credit unions play such an important role in terms of that personal and physical interaction on which they still place so much ethos and importance. It is one of the few premises, certainly where I live in west Cork, where one can still walk through the doors and talk to someone face to face. Obviously, we welcome and embrace technology, but there is something important about seeing that familiar face. It gives a feeling of comfort. That is something on which credit unions have placed so much importance over the years.

In terms of their functionality in society and what they provide, they are still the go-to assistance if someone is looking for a loan for a small extension, which many people in Ireland do. The credit union is the first port of call for that small to medium sized loan. Credit unions play an important role in farming communities and that is something to which I can attest. Their approach and strategy to farm loans is to encourage investment in farms and upgrading, be it from an environmental improvement point of view or by improving housing facilities for cattle or sheep. The credit union is that first port of call. The staff have so much knowledge on the ground. They are familiar with farms and how they work. That is something the bigger pillar banks sometimes miss. It is, therefore, important that we keep and protect that. Then, of course, there are community groups who will often knock on the door of credit unions looking for funding to support their initiatives. Much of that is contained within the Bill, which is encouraging. The Bill will assist that. We still need to have that conversation about the role credit unions play, however.

I would love to see them play a greater role in the mortgage market. We do not want them to lose that community base and community touch. However, what we are seeing in the mortgage market, and this has been expressed quite widely in this House, is that there is a monopoly in terms of the mortgage lending market. There are only a few banks here that provide those types of services. I would love to see credit unions involved in the mortgage lending market. It is my understanding that credit unions are not as tied to the European Central Bank, ECB, interest rate hikes so their involvement could provide a much more competitive market for people applying for a mortgage. I came here today to speak up on behalf of credit unions and about the important role they play. I commend the Bill and the difference it will make in terms of delivering for the community.

Deputy Richard Bruton

Like others, I congratulate the Minister of State on her appointment and I wish her well. This is a great start to her administration because this legislation seeks to empower what is a really powerful movement in our communities, with 400 branches nationwide and huge membership. Credit unions have €20 billion in assets at their disposal. That is the equivalent of €10,000 for every home in the country. At present, only 30% of that is lent out. There is, therefore, very substantial untapped capacity here.

The dilemma with a voluntary movement like this is always trying to straddle the two asks, that is, to be innovative within the community and, at the same time, be robust in applying standards of governance and protecting the money that is entrusted to them. This Bill seeks to walk that line very effectively.

We need to be ambitious to see that credit unions can become creative within our community and drive the capacity for greater self-sufficiency. As thinking around the circular economy takes hold, we will see an increasing need for social enterprises to emerge that do things that have not been done traditionally or that have been forgotten about, such as how to repair and recover things or how we manage waste streams in an innovative way. There will be plenty of opportunities where we can see integrated communities supporting social enterprises and initiatives in this area.

What is also exciting about this Bill is that it recognises that some credit unions have great strength of governance and the capacity to manage more ambitious lending, and others do not. It creates this concept of being linked to another larger credit union that has greater strength so that people can access accounts and other possibilities. I welcome this. We need to work with the credit union movement to know the capacity that exists. There always has been this slightly uneasy relationship between the regulator, which is seen as heavy-handed and perhaps applies rules that apply to professionally managed paid financial operations, versus the culture and tradition of credit unions. However, we have to make sure we do not lose the financial sturdiness at the same time. This is a good first step. Like others, I think we need to be ambitious, but in a prudent way. I have faith that in seeking to amend this as we move along, the Minister of State will approach it with that sort of creative but rightly prudent approach in financial terms.

An Cathaoirleach Gníomhach (Deputy Jennifer Murnane O'Connor)

I thank the Deputy. We will go to the Rural Independent Group. Five speakers will have four minutes each. Deputy Mick Collins will speak first.

Deputy Michael Collins

I congratulate the Minister of State on her new role. I hope to work closely with her going forward.

The closure of banks and lack of access to traditional banking services in remote areas has left many people without proper access to banking services. In fact, rural banking services in Ireland have been completely hollowed out since the financial crash. In many cases, only for credit unions, many rural residents would have no access to a banking account at all.

The banks in Schull, Bantry and Dunmanway closed in my constituency. The closure of all these branches in rural areas is devastating for a town or village. In some cases, it is the ruination of a town or village. The need for reforms in the credit union sector has been long-awaited and the Government has been slow to react to call for these reforms. We welcome this long overdue progress, however.

We are delighted to have our credit unions in rural areas. The credit union in Bantry even bought the old Bank of Ireland that was closed in recent times, which is great for the town. The personal touch from the staff and management in credit unions is something we used to have in the banks. We are lucky in rural Ireland to have it with the credit unions.

Look what happened last summer with the banks trying to go cashless. Only for myself, Deputies Mattie McGrath and Danny Healy-Rae and the people of Ireland kicking up blue murder, we would have had cashless banks. In the name of God, who came up with the notion of cashless banks? It is a bit like a pub with no pints; pure nonsense. My colleagues and I have tabled a motion for next Wednesday in the Dáil on this so-called cashless society. We hope every Deputy in this House will back our motion.

Broadly speaking, a credit union is a volunteer-run, member-owned organisation where people save and lend to each other at affordable rates of interest. They typically have a not-for-profit status and a strong community-based ethos. A common bond based on factors like living or working within a particular area determines who can join each credit union. All members have an equal input into the running of their credit union regardless of the level of savings they hold. These forms of co-operative financial organisations have unique features that distinguish them from banks. I acknowledge the importance of credit unions to Irish communities and individuals. I thank them for their values, which prioritise people over profits and focus on benefitting members rather than shareholders.

We have approximately ten credit unions in west Cork including those in Schull, Castletownbere, Bantry, Skibbereen, Clonakilty, Dunmanway, Bandon and Kinsale. I can certainly tell the Minister of State that each and every one of those managers works very hard with their communities. I know it for a fact because Deputy Danny Healy-Rae and I have sent hundreds, maybe thousands, of people to Northern Ireland for reimbursable operations. That is quite a lot of people. I cannot even advise them to go to the bank to get the €10,000 out for a loan to get their operations. I can certainly tell them to go to the credit union, however, and none of them come back. They are delighted with the way they are treated. They get a bridging loan for a short period of time and go to Northern Ireland for their procedures. The hip operation might cost €10,000, €12,000, €13,000 or €14,000. The credit union gives people the loan to pay upfront and they then get their money back in six to eight weeks and give it back to the credit union. That is an incredible service. The credit union makes very little money out of that service but it is still willing to work with the local community. It is an outstanding organisation and banking service, as such. Credit unions could actually compete with loans and mortgages but they are being continuously denied that. Why? The bigger bank is wagging the tail and stopping the Government from allowing this to happen.

While every Deputy comes into the House praising the credit unions, praise is not much good if the Government is not going to make a move to allow them to compete in a market they want to compete in but that they have not been allowed to.

I also thank the credit unions for helping communities that have been affected by bank closures and by reduced services during the pandemic. I urge the Minister of State to allow credit unions to open up their businesses to take on mortgages and take on the bigger loans, which they are well capable of doing.

Deputy Mattie McGrath

Ba mhaith liom buíochas a ghabháil le gach éinne ar na boird ar fud na tíre agus ar fud Thiobraid Árann. I would like to pay my richest and fullest compliments to the volunteers, the board members, the staff, and the management teams at every credit union in County Tipperary, from Carrick-on -Suir, to Clonmel, to Cahir and Tipperary town and the suboffices in Bansha, Ardfinnan, Hollyford, Thurles and in all of the towns in north Tipperary as well, for the work they do.

Banks literally do not want people inside them anymore. The banks have gone automated and they do not want a teller to meet anybody. You cannot find a manager or find anybody. The banks have abandoned the people even though it is the people who are paying with their sweat and blood and their hard-earned taxes to bail out the banks. It is disgusting how the banks have treated the people. As Deputy Collins said, we needed to take action last year to stop them going cashless, but for how long? The banks' intention is to hell with the people. If someone does not have a plastic card now or if he or she is not a number, then forget about it. People have to transact their business in the banks at a little machine and there is no privacy whatsoever. That is the sort of treatment they get. The credit unions are different. We met with credit union representatives when we invited them to meet with the Rural Independent Group to help us out with the EU health directive schemes, especially for those going to Belfast, through which countless people have been sent up for treatment. The credit union came on board to offer a bridging loan in these cases and nobody has been refused that. Nobody has been refused small loans, including for keeping their houses warm and for everything else.

There is something in this Bill I do not like, which is the provision allowing for credit unions to provide for the establishment of corporate credit unions. The word "corporate" frightens me because we have seen what corporate Ireland has done to the people of this country. We have seen what corporate international has done. We have seen what has gone on with "corporate" so I am very dubious and suspicious of the word "corporate". Some years ago in Clonmel we were almost forced to link up with the credit union in Charleville, County Cork, against the wishes of the members in Clonmel. Thankfully, it did not happen. It should be about the local knowledge and people supporting each other and ní neart go cur le chéile, the sense of the meitheal. Let us keep the corporate out of it.

We tabled a motion in the House to provide for the Sparkasse model similar to that in Germany and Kiwibank in New Zealand. However, does the Government want it? No. They lend to ordinary people every day of the week, and they keep them going. I was pleasantly surprised to find that 90% of businesses in Germany are small businesses. The Sparkassen support them all and the profits go back into the community. Of course, that would not do in greedy corporate Ireland. Let us consider the men that fought for Ireland and whose centenary we will celebrate, including Liam Lynch on 10 April, and the others who fought for this country. The corporate greed has come in now and it has tentacles everywhere. I put it to the Minister of State that we must keep them out of the credit unions. I would not support anything corporate inside the credit unions. That is one thing we can be sure and certain of. It is about the people in the credit unions and the vision of the boards, the management and the friendly staff, and the way they look after the people. This is what we want. It is about people looking after people, and taking them out of holes, whether it be for a funeral, during a sickness, for a home upgrade scheme or a new car loan or whatever. I do not refer to one of the fancy cars that the Government is forcing on people - I mean the ordinary car. Some years ago we were told to buy diesel cars, then we were told buy petrol cars and now we are being told that they are toxic. The corporate movement moves on, taking its orders from the World Economic Forum, WEF, and taking orders from Europe and to hell with daoine na hÉireann and Seachtain na Gaeilge. It does not care about our language. Patrick Pearse said that a nation is not a nation without its language, and it is not. We do not need corporates in credit unions. We want the boards to be allowed to work and to give their voluntary time, to be able to give their assessments from knowing the people and from their knowledge, and to give their expertise through their friendly staff and tá gach duine sásta leis sin. Why break something? This is the third or fourth attack. The banks are jealous of the credit unions. That is the whole story.

Deputy Jennifer Carroll MacNeill

I wish to clarify for the Deputy that the corporate suggestion came from the credit union movement. It is an important clarification. The corporate model proposal came from the credit union advisory committee and its members would be other credit unions.

Deputy Carol Nolan

I wish the Minister of State the very best in her new role. It is fantastic to see a female Minister of State in the House.

I welcome this Bill as an effort to respond to the concerns that have been raised for many years by individual credit unions and more widely by the ILCU. All of us here are aware of the enormous social value and the financial contribution that credit unions make to our communities, sporting organisations and voluntary bodies; the list goes on.

I have consistently engaged with credit unions in my constituency, including in Birr. I recently tabled a number of parliamentary questions to the Minister for Finance asking for clarification on the steps that will be taken to enable the credit union movement to grow as a key provider of community banking in the country. I and many others would love to see an expansion of the existing services, and certainly in terms of mortgage options. I would like to see options for younger couples and couples who are seeking mortgages. I would hope that it could be done in a way that the community ethos, which is symbolic of our credit union movement, would be maintained and retained, and that the credit union would not evolve into something else such a bank. There is huge potential for expansion and for a broadening of services.

Will the Minister of State examine the suggestion from the credit union movement to review the policy framework within which credit unions currently operate? I accept that this is now happening through the provisions of this Bill, which passed unchallenged in the Seanad. We are all aware that for many years now there has been a great need to allow for the creation of a legislative and regulatory credit union policy committee and a business model task force. These will enable credit unions to fill the vacuum felt with the exodus of banks such as Ulster Bank. It would also offer the customer and the ordinary household and business more flexibility and more competition around savings and loans. That is certainly something to be welcomed.

I acknowledge, with interest, the remarks made by the former Minister of State, Deputy Sean Fleming, when he was in office. He commented on the statistic that credit unions are lending only 27% - or €5.5 billion - of their €20 billion in assets. I agree with him that this figure is far too low and does not adequately address the latent potential that resides within our credit unions. There is huge potential for credit unions to develop plans for lending in the community, such as loans to small businesses, agri-lending, and retrofitting loans, along with mortgages, in a safe and cost-effective way.

I just hope that whatever this transition brings about, it does not result in a loss of the community aspect, and the face-to-face service for which our credit unions are widely known and respected. They must not become another faceless bureaucratic set of financiers, whose sole concern is the bottom line. For example, in the credit union in Tullamore, which was founded 60 years ago in 1963, there is an excellent arrears and personal finance programme available, which is provided free of charge to the members. It has been a huge success and very helpful for people.

Deputy Michael Healy-Rae

I warmly congratulate the Minister of State on her elevation. I wish her absolutely nothing but good luck and success In her role. I am sure she will be an excellent Minister of State and very diligent about her duties. I wish her well on that.

I am very glad to have an opportunity to contribute to the debate. On behalf of the credit unions in County Kerry, and on behalf of the people who have availed of their excellent services, I want to thank them. The credit unions that I deal with mostly are in County Kerry. Going back over the years, and before I ever came here to this House, I was on the local authority and I saw at first hand how important it was for constituents to be able to avail of the services of their own local credit union where there was a real personal relationship, be it for house improvements, farm improvements, for the purchase of machinery, and loans for all different purposes. I thank the credit unions for that.

When we look at what happened during the banking crisis, the credit union was one of the two institutions that really came to the fore and were sound and solid and we could always rely on. These were our credit unions and our post offices.

I link those institutions together and thank them for what they have done.

If fully supported by the Government, credit unions have the funds, market reach and unique ownership model to make a tremendous contribution to the people who have been denied baking services as a result of banks having pulled out of many rural areas in the past decade. The credit union model means that the benefits flow back to the members and communities. It is hoped that the new proposals contained in the Bill will facilitate real collaboration between credit unions. Each credit union is a separate legal entity with its own board and management team. Up to now, they have not been permitted to share business. The changes in the Bill will permit credit unions to collaborate, introduce loans to each other and collectively share loans. They will be able to establish a credit union for credit unions and have greater opportunity to invest in credit union-owned services and organisations.

What some of the pillar banks wanted to do was really hurtful. They have continuously cut back on staff and they are trying to go to a model of banks that have no personnel in them. That is impersonal and unhelpful. Not everybody is highly technologically minded. For many people, if they go in and see a bank of computers in front of them, they would not know how to manage. They would be worried about pressing buttons because they are dealing with money and could take out the wrong amount or make a mistake. They would be embarrassed to be trying to do that. Some people might think that everybody should be able to do these things but I am no expert at it myself and would always rather seek the assistance of a person working in the bank.

I compliment those who work in banks. It is not their fault that there are fewer of them; it is the fault of the bank management. Bank management came to County Kerry and said it wanted to close down many of our bank branches and make them unhelpful in terms of doing anything in them. It was a crazy idea, one that I completely opposed and fought vigorously. I am glad that places like Waterville, Cahirsiveen and elsewhere in east, south and west Kerry still have their bank branches. Imagine Dingle without a bank. It was crazy. It was only the height of uproar throughout Ireland that made the banks row back on that.

The bank advertisements with the slogan "We're backing brave" are probably the most hurtful advertisements I have ever seen put up by any organisation. I would love for those signs to be taken down and burned outside the doors of the banks they are up on. I will tell the banks a thing or two about backing brave. I know many brave workers who want to access money that is on deposit in these banks. A person who goes into the bank looking for money is made to feel like a small piece of dirt. It is as though the person is doing something illegal. He or she may as well be going in looking for crack cocaine as for a loan. There would nearly be a better chance of getting the cocaine on the way into the bank than getting money out of the bank. What the banks are doing to young people is so hurtful. These young people are diligently going out and doing their day's work, saving and doing everything they can, but then they have to face the bank.

God be good to some of the people we had in banks long ago. Some of them passed on to their eternal reward, while others are still alive but now retired. They had autonomy and could judge a character. They could look at a person and decide to take a chance and give the person a loan from the bank. They were managers, but they were real managers. Now we have people who are called managers but everything has to be referred to Dublin. Someone could be as solid as the Rock of Gibraltar and as genuine as the Pope in Rome but be refused a loan from one of the main pillar banks. I call them main pillar banks but I should call them mean pillar banks because that is what they are when it comes to giving money.

I thank the credit unions. Through the years, I have taken Kerry people to the North to get their cataracts removed. I was glad to have a bus full of Kerry people going to the North last week. They returned last Friday. I was glad that some of those people were able to avail of the services of credit unions. I want to show my appreciation on the floor of the Dáil to the Kerry credit unions that provided, through a very easy method, funding for these patients who needed to get cataracts removed. I humbly thank the people in those credit unions for being so kind, courteous and swift in helping those people. They know they are going to get their money back and they do not make a big song or dance about it.

High interest rates that are now creeping up on people and letters are being sent out to people who have a mortgage. It is an awful blow to a person who might be managing to pay €600 or €700 a month - it could be more or less - for the repayment to suddenly go up by €50 or €100. It could even have gone up by €200, given the number of hikes there have been. Those people are really hurting at present but we still see the signs up stating, "We're backing brave". Could we send the message out from Dáil Éireann for banks to go out and tell the truth, take down those signs, go outside the door with them and burn them because they mean nothing and it is misleading information? The day they start giving out loans, they can put up a sign boasting about it but, for the time being, they are not doing what it says on the tin.

Deputy Jennifer Murnane O'Connor

I, too, welcome the Bill. It is a long time ago that I, like my parents, became a member of the credit union in Carlow. All my children are now members as well. That is important. Credit unions have always been part of families and communities. Since I first joined, there have been great changes in credit unions but more change is needed. This is the first substantive credit union legislation since 2011. It is a first step to delivering for credit unions on a commitment in the programme for Government. It also reflects the potential of credit unions that was highlighted in the retail banking review.

The credit union movement plays a crucial role in communities throughout the country. They are voluntary not-for-profit organisations designed to serve their members and the wider community, such as by offering small business loans, car loans or mortgages. Of course, we cannot forget farmers. A credit union is an institution that is trusted by the people. I cannot stress enough the importance of the sector to financial services in rural Ireland, particularly in my home town of Carlow. Credit unions are the largest provider of personal unsecured loans, which are a lifeline for many families. They hold approximately €17 billion in savings and €5.5 billion in loans and serve 3.5 million members across a network of 204 credit unions and more than 400 branches. It is vital that we protect that network. Last year, during the early debates on the Bill we heard that credit unions are only lending 27%, or €5.5 billion, of their €20 billion in assets. We must support them to develop plans for lending in the community.

The Bill has many positive aspects and the process that led to it being drafted should be welcomed. When we work together, good things happen. In his previous role, my colleague, the Minister of State, Deputy Fleming, had more than 50 stakeholder engagements and met more than 60 credit unions, including in Carlow. He visited the credit unions in Carlow, Tullow and Bagenalstown.

Concerns have been raised within those credit unions. It is vital that we enable and support the credit union movement to grow but I urge caution that we do not lose the community spirit of credit unions. I was a little alarmed to hear recently of people being unable to access loan facilities, despite having been members of their local credit union for decades. They told me it had become a little bit like a bank. That needs to be considered. A credit union is not a bank; it is a community financial service. It has to serve the community in which it exists or it will be just another retail bank in a town. Credit unions are not simply an alternative to banks.

They are a model of community banking that can deliver a much wider range of services and an alternative financial platform. As people in our society move around more, and move between towns and communities, I welcome the flexibility in the common bond offered in the Bill to allow for the referral of members to other credit unions. This not only provides access to a service not provided by the referring credit union but allows for loan participation between two or more credit unions, in order to allow more businesses to be members and credit unions to lend to certain public sectors. I really welcome that.

All credit union members should be allowed to access a full-service community banking facility, regardless of their credit union size, which is another issue that was raised with me. This can support growth. However, I again caution that one of the most trusted things about our credit unions has always been the face-to-face element and local knowledge. I am a huge fan of credit unions. I welcome the Bill.

Deputy Neasa Hourigan

I join with colleagues in offering my comhghairdeas to the Minister of State on her appointment. I welcome the legislation, which is far-reaching and significant. It upholds the commitment in the programme for Government to examine this sector. In particular, broadening financial services and the foothold credit unions have in our financial services sector will be meaningful. I am particularly heartened by a focus on governance, considering governance structures, and that strategic planning piece. It is very worthwhile that there will be greater interaction between the Central Bank, the credit union advisory committee and the Minister. When we started this process, it was obvious that some of the communication could have been better and there were constraints that maybe did not need to be there.

I am also very supportive of the idea of the corporate credit union, something the industry has been seeking for a long time, as an answer to the spectrum of credit unions in the market and a way of parsing the difficulty in respect of the scale and size of some credit unions as opposed to others. I welcome the flexibility it will give credit unions in their own interactions and those with business. I hope we can use that greater flexibility to focus on societal issues, as finance is about society, such as housing, renewables and greater access to credit for SMEs.

I reiterate what was said by some speakers. Deputy Mattie McGrath said a little about this, as did a previous contributor, namely, that I hope we do not lose some of the strengths credit unions have as a result of these changes. I do not often agree with Deputy McGrath but on this I do; credit unions are in people's communities. They are here. The Minister of State will know this because we have sat on committees together discussing this issue previously. For somebody with a visual impairment, a mobility issue, or who is hard of hearing or does not feel confident moving too far outside his or her community - there can be many reasons - having a face-to-face interaction is what financial inclusion is about. We tend to think of it as people having to getting more tech savvy. It is not; financial inclusion is for everybody. Financial services are a utility just like water and we need to think of them that way. Even though I would like to keep the idea of public banking on the table, credit unions at present could fulfil that safer and more compassionate access and financial inclusion.

Deputy Thomas Gould

I welcome the opportunity to speak on this Bill. Credit unions are in a unique space in the context of financial institutions in this country. They are rooted at the heart of communities, which makes them completely different from the banking sector and the way it is now. Credit unions are often compassionate institutions that offer people support.

I will briefly touch on a couple of matters. I have concerns about parents and vulnerable people being pushed to illegal moneylenders. We have an opportunity with credit unions. The Government now has a unique opportunity to use credit unions to bridge that gap. We now see one in ten parents having to use food banks amid the rising cost of living. People are at the pin of their collars. We see that in my constituency in Cork city where additional needs payments to people looking for help have trebled in 12 months. More than 2,000 families and individuals were refused help through the additional needs payment. Where will those 2,000 people and families go? Many of them will not qualify for bank loans. They might not be able to get a credit union loan and will then go to moneylenders. That is why credit unions need to fill that gap for the most vulnerable. There is a real fear people are forced to go to moneylenders because they have no other place to go. They are forced to go to them to pay for basics, such as food, clothing and electricity. That is why the Government needs to support and empower credit unions. They may also need to meet with them regarding filling that space because it is such a vital area.

I will raise another matter, which is a criticism of credit unions. Many of them used to offer a death grant, towards which a member paid a certain amount each year. In my constituency in Cork, it ranged between €1,500 and €4,000. That was for people who did not have private health insurance. Many of them were older people for whom the credit union was the way they would put money away to be buried. It is not a nice thing to say, but that is the reality. When many credit unions moved away from that kind of insurance policy, they left a gap in the system. I know of people who struggled to put money away so they could be buried. That is something the Government should look at with credit unions. For many people who do not have much money, that type of insurance policy, amounting to €3,000 or €4,000 to be buried, should be put back on the table by the credit unions. I recognise some of them do that. It is especially needed for older people who need that safety net.

In the community in which I live, there are credit unions in working-class estates and affluent areas. It is a brilliant community. The vast majority of work credit unions do is also brilliant. My worry is they are becoming more like banks. I want to see them community-based.

I recognise the sponsorship credit unions give to local communities. I see that with the GAA club in my area, St. Vincent's, where Gurranabraher Credit Union supports the street leagues, as do Cathedral, Blackpool and Mayfield credit unions. If it were not for all these credit unions, many local, ordinary clubs, groups and societies would not have financial support. I thank the credit unions for that. There is a big opportunity for them to do more to support families in not going to moneylenders.

Deputy Catherine Connolly

I dtús báire, cuirim fáilte roimh an deis a bheith páirteach sa díospóireacht seo. Tá an Bille seo thar a bheith tábhachtach. Tá na comhair chreidmheasa ar an bhfód ó 1958. Sin thart ar 65 bliain. Le linn na tréimhse sin, ní féidir luach a chur ar na seirbhísí agus an tacaíocht atá tugtha ag na comhair chreidmheasa do chosmhuintir na tíre. Tiocfaimid ar ais maidir leis na sonraí ach go hiomlán is céim dhearfach í seo. Bheinn ag súil gurb í an chéad chéim chun córas baincéireachta a chur ar fáil nach bhfuil bunaithe ar bhrabús.

I welcome the opportunity to take part in this debate. We are debating legislation that will empower and enable credit unions to put forward a wider range of services, which I welcome. Credit unions have been in Ireland since 1958, which is almost 65 years. I could not put a value on the work they have done and the services they have given, through thick and thin, during that time.

I would like to think that this first positive step is a step on our way to realising and implementing community banking in the real sense, a banking system that is not based on profit.

As for practical matters, I pay tribute to, and I have already congratulated, the Minister of State in her new role. I wish her the best. I thank the previous Minister of State, Deputy Fleming, who put in a tremendous amount of work on this and kept us informed every step of the way.

I am a little worried about a number of things. I will come to the positive ones. The Minister of State at the time, Deputy Fleming, pointed out in his speech to the Seanad that the cúlra or the background to this Bill is the shrinking banking sector. That is a worry because the shrinking banking sector really should not be what is moving us to improved credit union facilities. This should have been proactively done as the way forward and to balance the unregulated, faulty banking system that brought this country to its knees. We should have taken action in respect of the credit unions a long time ago, like we are beginning to do with this Bill, giving recognition to the work they have carried out.

I thank the Library and Research Service again for its work. Its staff are always under pressure, not because of themselves - they do tremendous work in educating us - but because of the way in which matters come before them, always late. They are always under pressure, and that is not helpful. I do not know if the Minister of State has any influence on that. The Library and Research Service points out very helpfully to us the differences between credit unions and banks. It is very important to highlight some of them. Seven differences are listed in the Bill digest. The digest compares and contrasts, like a school essay. Let us look at the eighth difference listed, namely, that credit unions "Exist to attain the economic and social goals of members". That is crucial. On the opposite side, it is stated that the banks "Exist to maximise profit and shareholder wealth".

I should declare - I should have done so at the outset - that I am a proud member of a credit union i gcroílár na Gaillimhe, a credit union in Galway, along with 3.6 million other members of credit unions in Ireland.

Returning to the compare-and-contrast essay, the last difference listed states that credit unions exist for the social and economic goals of their members. They are not for profit. They "Conduct business solely with their members". Note here that they are not customers. We are customers of banks but we get no services, really. When we go into banks we have to talk to a machine. Credit unions' business is conducted for their members. Their "Members share a common bond, such as where they live or work". That common bond is very important. I know there are positive changes in the Bill in respect of extending that common bond. That is to be welcomed because if I cannot get a current account in my credit union in Galway, it cannot refer me to another credit union under existing legislation, so it is very welcome that that common bond would be extended but not lost. It is extremely important we keep it.

The digest states that "Credit union members elect a volunteer board of directors from their membership." Again, I know there are some changes proposed in the Bill whereby the manager could get on the board, which would be up to the credit unions. The banks:

Typically serve middle-to-high income clients. No restrictions on clientele.

Shareholders vote for a paid board of directors [that is what the banks do] who may not be from the community or use the bank's services [etc.] ...

Back to the credit unions, the digest states, "Surplus monies generated from business activities belong to the members". They belong to me and the other 3.6 million members. In contrast, with the banks, "Shareholders receive a pro-rata share of profits." The sixth difference is that "Financial services provided [by credit unions] are primarily basic savings and loan products with some insurance offerings", whereas "A wide range of financial services are on offer" from the banks. I have no problem extending the range of services offered by credit unions. When I was obliged to change my bank, the credit union was my first port of call. Given the complexity of the way we are paid, it just did not suit. It was difficult. It was not easy for the credit unions to facilitate new members coming from various banks, including Ulster Bank. The Library and Research Service has conveniently set that out for us, and it is very important to keep it in mind.

On one other practical matter, we were led to believe by the Minister of State, Deputy Fleming, when he gave his speech to the Seanad and when he updated us, that this legislation is to give effect to the review of the policy framework for credit unions. Where is that policy framework? I would love to see it. My colleagues who work with me in my office have tried to get it. I have not seen it. I would really like to see what was set out in it and what we are acting on. Maybe we are acting on everything; I do not know. It is particularly important given that there was no pre-legislative scrutiny of the Bill. I do not know why there was no pre-legislative scrutiny. I know the former Minister of State, Deputy Fleming, highlighted more than once the number of stakeholder meetings he had and the amount of work done, which is clear to see, but I would like that done in a more open and accountable manner because that is what this legislation is about. I note that there are non-legislative changes as well to bring about more openness and accountability, which I might come back to, but there was no pre-legislative scrutiny. Maybe the committee waived it. I would not think that is a good idea. This should have been thrashed out so we could see it and see the possibilities, what is not being done and what the necessary extra steps are that we need to look at in providing community banking, whether that is the credit unions, An Post or a brand-new agency. I do not mind - I am open - but I would like to be educated on this, and that has not been teased out whatsoever.

As has been pointed out numerous times, the Bill provides for "the establishment of corporate credit unions ... [to] enable credit unions to share resources and opportunities". Again, I have no difficulty with that. I do have a huge difficulty, like Deputy Mattie McGrath, with the word "corporate". I know the Minister of State has said that this has come from the credit unions themselves. Again, if this were debated and teased out with pre-legislative scrutiny, we would know where they were coming from and perhaps a different word could have been chosen to continue to reflect the ethos of credit unions, which are there to serve their members, not to make a profit, and certainly not get too big. If anything, and at the risk of boring listeners, we need to go back to local and smaller rather than bigger and more transnational. That is what we have learned from Covid and the banking breakdown and what we are learning from climate change, so I have huge difficulty with that word.

The Bill provides "the legislative basis to increase the maximum monthly interest rate on credit union loans". I understand that. It is to give flexibility and to increase it to 2% at a maximum, if necessary. I have already mentioned the option of placing a manager on the board. The Bill provides for extended services and flexibility with the common bond or an extension of the common bond. Then there are practical matters like the members of the board, the number of meetings per annum and the different types of administrative obstacles, which make perfect sense to me.

Over the 65 years since 1958, we have gone from having between 400 and 500 credit unions to having 204 now. That is good and bad, in a sense, because if the ethos of the credit union is to serve and to be there, there is a danger, as we make them bigger and bigger, that they become the very things we do not want them to be and they themselves do not want to be. Again, I pay tribute to the credit unions and the 2,500 volunteers, approximately. It is an incredible story, that of a service based on volunteers, with paid staff, that has been there through thick and thin to give loans to people, trust on both sides being of the essence in order that someone like me, or someone earning perhaps a lesser salary, can walk in and be treated the exact same and have the same respect and dignity shown to them but, more importantly, have the same rights, including the same legal rights, regardless of salary. It is an incredible concept and something from which we have to learn. That is why the publication of the review is very important in order that we see what is going on and where we should go in the future.

The other thing that struck me in the speech of the Minister of State, Deputy Fleming, in the Seanad was that he pointed out that approximately €20 billion in assets is held in credit unions, that a small percentage of that has been used for loans and that they have been utterly restricted as to how they can use that money.

The Minister of State, Deputy Carroll MacNeill, pointed out and I know from having checked it myself - I thank again the Library and Research Service for pointing it out also in its Bill digest - that there are now vehicles in place that allow the credit unions to loan money to housing associations. Does she have an update on that? I know the year in which these came in, and I am not taking issue with the year, but it often takes a long time for such a collaborative vehicle to become active. When did credit unions become active in the actual loaning of money to approved housing bodies? How many loans have been approved? If the Minister of State has figures and details on that, I would be interested to hear them. She can provide this information at the end of the debate.

I also acknowledge that there are non-legal aspects to this. I welcome that there will be a memorandum of understanding on this between the Central Bank, the advisory committee and the Department. I also welcome that there will be an increased emphasis on transparency within the sector. I welcome all of that.

I am worried about the use of the words "corporate" and "ventures". The Government seems to be learning how to do this better but forgive me if I am cynical at my age and with my experience of having watched the banks and having seen everything be commodified, from housing to health. Forgive me, therefore, if I do not have as much trust as I should in this system. The first thing is to publish the review. The second is to build a review into this legislation in order that we can examine whether it is attaining what it is supposed to be attaining. Third, we must go back to whatever mechanism is relevant to how we establish a community and national bank that is fully based on providing all the services on a non-profit basis that serves us best. As I said, whether that is the credit union, the post office or a new entity, that is one thing we have to have learned from the debacle of the banking crisis.

Deputy Emer Higgins

I congratulate the Minister of State. I know she has been engaging with the sector and I have had some positive feedback from members of my credit unions on the work she is doing on the ground. I know that will be the tempo the Minister of State has set in the Department. I wish her well in her new role.

There is great opportunity and untapped potential within our credit unions. We have an opportunity to expand community banking services. The withdrawal of Ulster Bank and KBC Bank added an urgency to things. I know from one of my local credit unions, Tower Credit Union in Clondalkin, which is now also in Rathcoole and Citywest, that there has been a considerable transfer of new current account business since the decisions of Ulster Bank and KBC Bank to close. We all agree that the credit union sector has gone through substantial change over the past ten years but it remains vital when it comes to our communities. I was delighted to be able to welcome the Minister, Deputy Donohoe, to Palmerstown Credit Union last year to showcase the great service that it provides in our local community. We would welcome a visit from the Minister of State to any of our credit unions. Palmerstown is one of a number of phenomenal examples of great credit unions that are adapting to the changing landscape in banking, technology and social media. We have also had a spate of mergers and consolidations in the sector locally. We have seen Rathcoole Credit Union closing and relocating to Citywest. That has been a considerable disadvantage to us in Rathcoole, particularly to people who do not drive. We have also had the Clondalkin Credit Union, the Four Corners Credit Union and Neilstown Credit Union merge to form Tower Credit Union.

Many credit union directors have complained about the growing regulatory burden on volunteer boards and because of that there has not been a rebalancing of responsibilities between the volunteer directors and management. The reforms in this Bill address those concerns and will rebalance responsibilities adequately.

I also welcome the provision to allow credit unions to seek consent from members to receive the annual accounts by electronic means. Tower Credit Union in Clondalkin advises me that this will save it significant amounts when it comes to printing and postage costs, as well as the cost of somebody doing this work from a time-saving perspective.

A number of provisions in the Bill are designed to facilitate a focus by the board on strategic planning rather than just operational issues. This is also a welcome move because it will enable greater collaboration among credit unions and allow them to take equity stakes in corporate entities to share resources and opportunities. That is an important reform. There has been much complaint that the Central Bank’s strategy was to keep merging credit unions into larger entities. However, as the previous speaker said, they may potentially lose their community focus in this way. The enabling of credit unions to take equity in corporate entities allows them to retain their individual independence while being able to lend members' funds productively, at scale and in conjunction with other credit unions.

Irish credit unions nationally have a loan-to-asset ratio of 28%. This means that €5.5 billion of their €20 billion in assets is lent productively and the rest is in bond investments and on deposit in the remaining retail banks. This is not desirable or sustainable. The founders of the Irish credit union movement never intended for only 28% of members' savings to be lent productively. This Bill makes provision for the establishment of corporate credit unions, a new type of regulated vehicle. I would like to see reform to allow credit unions to establish lending vehicles to support SME innovation and expansion in the domestic market, as well as supporting social enterprises in the community and funding the provision and purchasing of housing.

There have been many advocates for an expanded community banking sector to replace the closed bank branches across the country. It is important that credit unions are key stakeholders in any expanded community banking network. There are many SMEs that would benefit from the type of relationship that banking had traditionally been offered through credit unions. I would be interested in the Minister of State's views on how this legislation could advance the establishment by credit unions of corporate entities to support SME growth and development, and whether that can be established with other community institutions like post offices, the Strategic Banking Corporation of Ireland, SBCI, or local authorities.

Credit unions in Ireland have a bright future. When the retail banks closed branches or withdrew from the Irish market, the credit union movement remained steadfast. It remained rooted in communities up and down this country and this legislation will allow credit unions to lend more of their members' savings productively, which is welcome. I express my gratitude to the 2,500 volunteers, staff and customers who are the backbone of the credit union movement in Ireland. I especially thank those working in Palmerstown, Lucan, Clondalkin, Rathcoole and Citywest.

An Leas-Cheann Comhairle

There are two more speakers in this slot. They have agreed that Deputy Danny Healy-Rae may take a few minutes of their time. Is that agreed? Agreed.

Deputy Alan Dillon

I too thank the Minister of State for allowing me to discuss this Bill. I wish her the best in her new role in the Department of Finance. I know she will hit the ground running.

This is the first substantive credit union legislation for over 12 years. More important, this Bill has been welcomed and supported by the Irish League of Credit Unions, which says it has many positive aspects. That is an important endorsement.

Credit unions play an important role in providing financial services and support to communities in rural Ireland. They offer a range of services to their members, including loans, savings, current accounts, debit cards, apps and online banking. In my constituency of Mayo there are over 14 credit union institutions, including Claremorris, Charlestown, Foxford, Swinford, Ballyhaunis and Westport. They have high customer numbers and provide a vital service to businesses, farmers and individuals alike. Some months ago, St. Colman's Credit Union in Claremorris and Ballinrobe launched two new loan types to meet the financial needs of its farm and business customers with flexible repayment options that supported land purchases, farm developments, grant aid investment, machinery purchases and stocking.

In rural constituencies such as mine, traditional banking and financial institutions are often scarce or non-existent and credit unions provide a much-needed source of financial services, including savings account loans and other financial products. Along with the withdrawal of KBC Bank and Ulster Bank from the market, Bank of Ireland has closed three of its branches in Ballyhaunis, Charlestown and Kiltimagh, which the Minister of State knows well, over the past two years. The remaining seven branches in the county do not offer a counter service, just self-service machines. This is an issue the credit unions could address.

In some of our towns in Mayo, credit unions are the only financial institutions where customers can walk into the building and discuss their financial options with an employee. In contrast to traditional banking institutions, credit unions are owned and controlled by their members, who typically reside in the area. Those working behind the counter are local and provide a friendly, welcoming service, which means that all decisions about how the credit unions operate are invested in their locality, which can help support economic development and job creation locally. Credit unions often provide more than just financial services. They support community development initiatives, such as sponsoring local events, offering financial education programmes, and providing much-needed resources for community projects.

This Bill is an important first step in delivering the commitments of the programme for Government. It is also important that we may provide additional funding and supports to the credit unions to help them to expand their services and reach more communities. We need to encourage more lending in areas such as mortgages and small business loans. I would also welcome the opportunity for credit unions to be able to offer credit card facilities further down the road. From our engagement with local volunteers, regulations are always a challenge. There is an ask for streamlining and for it to be made easier for credit unions to comply with rules and regulations, while maintaining the necessary safeguards for depositors and investors. Many volunteers who make up the boards of credit unions are severely challenged by the bureaucracy they need to get through in the Central Bank regulations.

We need to encourage credit unions to collaborate and form partnerships with other financial institutions, company organisations and local businesses. We could incentivise them to develop innovative financial products and services, such as the one I previously mentioned, offered by St. Colman's Credit Union, which is tailored to suit the needs of the local community. We also need to provide credit unions with small products that will compete with AIB, Permanent TSB and Bank of Ireland, which currently have a monopoly on the financial market and which, despite showing record profits year after year, fail to pass these on to customers with additional incentives.

Overall, our local credit unions play a crucial role in providing financial services and support to rural communities in Ireland. By offering locally-owned and controlled financial services, promoting community development and supporting economic stability, credit unions are certainly helping to build stronger and more resilient rural communities. This Bill is the first step, as I mentioned, but we need to continue to engage with organisations such as the Irish League of Credit Unions to ensure these objectives are realised.

Deputy Michael Moynihan

I will take about six minutes and then defer to Deputy Danny Healy-Rae. I welcome the opportunity to speak on the Bill. I congratulate the Minister of State, Deputy Carroll MacNeill, on her new role and wish her the best in it. I should state that I have a vested interest in this. I am a member of Newmarket Credit Union in County Cork. I pay tribute to Dorothy and her team for the excellent work they do. We are well served by credit unions in Kanturk, Rathmore and Mallow, the latter of which has branches in Millstreet and Charleville. Dedicated people work behind the counters there. The credit union has a voluntary board which reaches out to the community. It is important that we acknowledge the volunteers who work in the credit union movement and the work they do. It is a community initiative. They see the good that is being done. They are volunteers who we should encourage because we have seen that volunteerism is pulling back in society and it is important that we acknowledge it.

I come from not too far from the village of Ballydesmond, which is the home of Nora Herlihy, who founded the credit union movement long ago. What the credit unions have done for families and communities over the decades is immeasurable. Many people have benefited and gone through college. Many have been able to access credit, whether for a start-up or their first car. Whatever it was, they were able to access the credit unions. That was how it was at the start. The credit unions have since moved to having substantial assets and lending, with 28% or 29% of their total assets now loaned in a meaningful way. There is much money in deposits. We have seen banks disappear from communities, leaving them with one financial institution, which is the credit union. By and large, it has picked up the slack, whether that is for the farming community, personal loans or some small and medium business loans. The credit unions have picked up the slack and thank God for them.

It is now time for us to re-evaluate what a massive contribution the credit unions have made to Irish society and how we go forward and ensure that the credit union movement expands as society and its demands expand. We also need to ensure the credit union movement reflects the challenges faced in people's lived experience nowadays. Going back to 2008 and 2009 when the crash happened and all the regulations came from it, the credit unions were, by and large, well protected. They had good lending practices. They now have the same level of regulation and the same amount of corporate governance to go through. It is time for us to look at it to see if there is a way of having accountability for the credit union movement while also easing the burden of regulations on it. We talk about voluntary boards, training and so on, but it is something we should look at. We should also look at how we expand the services into mortgages, ATMs and, while some credit unions have been able to do it, credit transfers and so on. That needs to be looked at.

Fundamentally, we have to accept the massive positive contribution that credit unions have made in urban and rural Ireland. Some of the bodies that came together to form credit unions have provided funding to people at various difficult junctures in their lives. How do we ensure, for the next half century, that those credit unions will still be there, as strong in their communities as they are today, and able to cater for the needs of people who are at crisis points? We are going to try to keep families and communities away from moneylenders, so the option of last resort is not the moneylender but the credit union.

The challenge for us is to accept the good that has been done and look at how we legislate to ensure people continue to have this service. They have a trusted brand in their communities. Credit unions are of the communities and want what is best for their communities. That cannot be measured. How do we ensure those same bodies continue to do that for the next generation? Therein lies the challenge. Some people will argue for removing some of the regulations. I do not think that discussion can be had because regulation has to exist and we saw what the absence of regulation led to in the past. We also have to make it easier and simpler for credit unions to comply with the regulations. Some 28% or 29% of their funds are loaned out. Can the other 70% be used in a meaningful way to meet the challenges faced by society? I wish the Minister of State the best of luck in her role. In the legislation she is passing and in any interaction she has with credit unions, I ask her to ensure they are as strong in 50 years as they are today.

An Leas-Cheann Comhairle

I am afraid there is no time left for Deputy Danny Healy-Rae to speak.

Deputy Michael Moynihan

Is there not three minutes?

An Leas-Cheann Comhairle

You have one minute.

Deputy Danny Healy-Rae

I thank the two previous speakers for allowing me one minute to speak. I too acknowledge the magnificent role the credit unions play in our local communities. I thank them for the bridging loans they give people who travel to the North of Ireland to get their cataracts, hips, knees and all of those things done. Credit unions facilitate those people who travel to get that necessary intervention or risk losing their sight or ability to walk. People must put the money upfront but they get it back and are able to give it back to the credit union. I especially thank the credit unions for playing ball with these people. The credit unions operate locally and know the people they are dealing with. We have bank managers who operate from Dublin and do not know the people on the ground who are looking for small amounts of money to stay afloat.

I wish the Minister of State well with the Bill. The credit unions seem to be happy with it and once they are happy, I am happy too because they are very important to the communities in which Deputy Michael Moynihan and I live. We share Ballydesmond. I operate on the Kerry side and he operates on the Cork side. We are all very proud of Nora Herlihy who started the credit union movement.

Debate adjourned.