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Pringle calls on Taoiseach to expand remit and autonomy of credit unions
- Updated: 10th March 2021
Independent TD for Donegal, Thomas Pringle, has called on the Taoiseach to expand the remit and autonomy of credit unions, calling them, “the lifeline of many communities”.
During Leaders’ Questions in the Dáil today, Deputy Pringle said: “With announcements in recent weeks of Ulster Bank and Bank of Ireland withdrawing from the Republic and closing branches, there is an opportunity for thriving credit unions and post office networks.” He said a number of credit unions across Donegal are seeing an increase in people moving their deposits there.
Deputy Pringle said: “But credit unions are hamstrung by regulations on deposits which see them limiting deposits as they are forced by government policy to make a loss on holding people’s money. This was to shore up the balance sheets of banks during the crash and now continues to facilitate the banks to the detriment of the credit union co-operative model that serves our communities so well.”
He said: “Since the enactment of the Credit Union Act 2012, their cost base has risen dramatically, from less than 20% of their total income then, to more than 80% in some cases. There is also reported increasing, ongoing pressure from the Central Bank of Ireland to add even more ‘regulatory compliance’ staff and costs.
“These costs are unsustainable and will put many local credit unions out of business,” he said.
He said he has been told that credit unions need legislation appropriate to their members’ changing needs.
Deputy Pringle said: “Currently, all responsibility lies with credit union directors and CEOs to develop and deliver services to members. However, the Central Bank then has the authority to block, frustrate or veto any such services or initiatives. In effect, I am told that credit unions have been given the responsibility to deliver those services needed, but zero authority to do so.”
He said: “I have recently been highlighting the stark housing problems in Donegal. Credit unions have been offering a viable solution for investment in social housing for years now. The Irish League of Credit Unions has put forward proposals for credit unions to invest in social housing but a decision is still outstanding.”
And while Bank of Ireland has organised an exclusive contract with An Post, credit unions are not allowed to explore such possibilities, he said.
Deputy Pringle said: “Taoiseach, will you now expand the remit and autonomy of Credit Unions? Credit unions are member-owned and have been the lifeline of many communities over many, many years.”
He also asked why all credit unions couldn’t introduce debit card services and called for the Department of Finance to reverse the increase of the Industry Funding Levy, saying, “As highlighted in the ICLU’s ‘Credit Unions’ 2020 Vision’ this levy is ‘a tax on social capital and a levy on volunteers.’”
Deputy Pringle said: “We need a radical review of legislation for credit unions and move towards an expanded range of community banking. The idea of community banking has been very popular in recent weeks as we see that traditional, for-profit banks are looking at automating their services where possible.”
