'Concerted Policy Initiative' Needed For Credit Union Sector - FF

Fianna Fáil has called for a "concerted policy initiative" to ensure the full potential of the credit union sector in Ireland,

The party's finance spokesperson, Michael McGrath, made the call ahead of a Fianna Fáil Private Members was introduced in the Dáil.

"The credit union sector has a proud tradition in communities throughout the country. With expert local knowledge and strong personal relationships, credit unions are able to make sound judgments about lending to individual customers, small businesses, the self-employed and farmers," Deputy McGrath said.

"The sector has survived the crisis well, with just 1% of credit unions needing state funding support since the financial crisis began. The not for profit and independent nature of credit unions is vital to the success of the sector.

"However the reality is that the sector is effectively stagnant, with the amount of its funds out on loan declining year after year. The sector can only make money if it is able to issue new loans. In too many instances, the ability of credit unions to do just that is being unnecessarily constrained.

The Fianna Fáil Dáil motion will set out a number of key initiatives aimed at bringing new vibrancy to the sector:

• A review of Section 35 legislation relating to restrictions on rescheduled loans and term limits on lending;

• A streamlining of the process for the approval of additional services;

• A financial impact analysis to be conducted on the extent of losses incurred by credit unions arising from the Personal Insolvency legislation;

• An examination of the Personal Insolvency Act by the Competition and Consumer Protection Commission;

• The Central Bank in its Consumer protection role to engage directly with Credit Unions to establish the impact the current legislative and regulatory restrictions are having on communities.

• The Minister for Finance to bring forward a white paper on the role of the Credit Union sector within the broader financial services sector in Ireland;

• The establishment of an industry-led forum with representation from all stakeholders that examines the future growth potential of credit unions in Ireland.

(MH/CD)