Credit unions offer €8bn in surplus funds to build social housing

Credit unions have more than €8bn in surplus funds which could be used to help address the social housing emergency, but have been prevented from doing so by the State, it was claimed yesterday.

Representatives of the country’s credit unions appeared before the Oireachtas finance committee and said they were “bewildered” at the continued failure by Finance Minister Michael Noonan or the Central Bank to listen to them.

Central to their complaints is an objection to pending legislation to regulate the credit union sector, which they said is completely ill suited and needs to be radically amended.

On foot of their concerns, the committee is to write to Mr Noonan to delay the signing of the legislation to consider the proposed amendment brought forward by the sector.

Ed Farrell, chief executive of the Irish League of Credit Unions, told committee members that the relationship between them and the Central Bank is “frankly a difficult one”.

“The relationship with the Central Bank is very difficult. Frankly, we have been subjected to a uphill relationship with the regulator,” he said.

Kevin Johnson, CEO, Credit Union Development Association, said the over-regulation of the sector would force its demise.

“Strangling credit unions with over-zealous regulation will see their demise and force credit union members to switch to more expensive banks,” Mr Johnson said.

“Before Minister Noonan allows further rules come into effect, he should conduct a review on how the commission’s recommendations are being implemented and whether the legislation and regulations reflect the current needs of credit union members.”

Committee members sought to explore why the massive cash reserves have not been tapped into at a time when there is a massive shortage in social and affordable housing.

Sean Hosford of the Credit Union Managers’ Association responded by saying: “We are baffled. Everyone loves us but no one seems to be able to help us.”

Responding to the calls for Mr Noonan to delay the introduction of the legislation, People Before Profit TD Richard Boyd Barrett said: “Why the hell are the Government and the Central Bank not listening and I am shocked that they have not taken up your offer to help build social houses.”

Richard Boyd Barrett

Even government TDs said more needed to be done to help the sector. Michael Creed, Fine Gael, said the Government needed to be careful not to penalise the sector by over regulation.

Fianna Fáil’s finance spokesman, Michael McGrath, pressed committee chairman Liam Twomey to write to Mr Noonan to delay the signing of the legislation, to which Mr Twomey agreed.

The Irish Examiner has also learnt of increasing unease within Fine Gael over the failure to address the concerns of the credit union sector.

“There is an increased sense that some form of compromise will have to be reached over the new regulations. None of us want to be responsible for the demise of the credit unions in Ireland,” said one Fine Gael minister.