#Open journalism No news is bad news

Your contributions will help us continue to deliver the stories that are important to you

Support The Journal
Dublin: 17°C Saturday 25 June 2022

Could credit unions be on the way out? They're said to be under 'sustained attack'

Fianna Fáil thinks the sector is burdened by “excessive regulation and bureaucracy”.

Image: Sam Boal/Photocall Ireland

FIANNA FÁIL’S FINANCE spokesperson Michael McGrath has said action must be taken to ensure the future of credit unions.

McGrath said the sector is facing “major challenges” and needs more support.

“It is our view that the credit union movement is under sustained attack from a combination of excessive regulation and bureaucracy and a completely indifferent approach from government.

“There’s a very clear lack of a strategy for the future growth and development of the credit union sector.”

McGrath was speaking ahead of a Dáil debate on a Fianna Fáil motion on the subject, which is due to take place tonight and tomorrow.

He said “onerous lending restrictions” are leading to a difficult environment for many credit unions, noting 52% now have such restrictions, with some unable to grant loans greater than €10,000.

McGrath said that, according to the Irish League of Credit Unions, the sector had around €5 billionn to lend ,but it is not able to do so due to restrictions.

He added that the Central Bank’s proposed cap of €100,000 on savings at credit unions shows the bank and the government don’t have confidence in the sector.

Legislation To Tackle Home Repossessions Michael McGrath Source: Mark Stedman/Photocall Ireland

“In years to come the movement will be a shadow of its former self if nothing changes and nothing is done,” McGrath said, stating that the sector is needed “now more than ever” to provide “badly needed competition for banks”.

#Open journalism No news is bad news Support The Journal

Your contributions will help us continue to deliver the stories that are important to you

Support us now

New loan scheme

McGrath said he was “sceptical” of the Department of Social Protection’s announcement of a new loan scheme from credit unions and post offices to help people avoid moneylenders.

Under the Personal Microcredit Scheme, people can borrow up to €1,000 with approval in just an hour, after a number of credit checks.

McGrath questioned the timing of the announcement, saying the coalition’s annoucement “comes against the backdrop of the government completely ignoring and undermining the credit union movement for the last four and a half years in office”.

Read: Is the Credit Union going to start doing mortgages?

Read: Credit union ‘lent €3.1 million for five years with no interest or payments’

About the author:

Órla Ryan

Read next: