Last Wednesday, the Seanad discussed the future of the Credit Union Sector and the need to allow it expand and develop.

Cuirim fáilte roimh an Aire Stáit, an Teachta Fleming, go dtí an Teach. Cuirim fáilte roimh dhíospóireacht ar an ábhar seo a bhaineann le hearnáil na gcomhar creidmheasa trasna na tíre. Very few movements have impacted on this country more positively than the credit union movement. Its excellent work in communities throughout the country has been phenomenal, and the level of trust placed in it by its members is a testament to how well run the sector has been and how its priority has always been its members and the communities in which credit unions operate. I acknowledge the driving force that was John Hume, among others, behind the credit union movement across the island of Ireland. The strength of the credit union movement is a testament to his vision and work.

I am obviously most familiar with the credit unions in my county of Galway whose combined assets total just short of €1 billion and that offer a banking alternative to tens of thousands of members across the city and county. In fact, with the rationalisation and downgrading of the banking sector across county towns and larger urban areas in particular, the local credit union is now the only financial institution with a physical presence in many towns and villages.

We would expect our credit unions to finance much of the hundreds of millions required to fund the retrofitting of homes to meet our climate change targets and the ambitious retrofitting programme recently announced by the Government. At present, credit unions fund small loans that fund many activities such as cars or education. Many credit unions now offer current accounts and mortgages. In effect, they offer a full banking service. I was very pleased to see the Minister of State being given responsibility for credit unions. I expect it is a sign of the importance the Government places on the sector. I hope it means the needs of credit unions will be addressed so that they can better support their members and communities.

There has been a lot of rationalisation within the sector, with amalgamations of credit unions leading to more robust institutions with greater resources and security available to their members. The Department of Finance is conducting a policy framework review of the credit union sector. This review will guide policy for the sector over the coming years. It is very important we get the best possible outcome for the sector as a major banking force and for its members.

Credit unions operate under the 2012 legislation, which was introduced in the aftermath of the financial crisis and probably shows an excess of caution in dealing with the sector. While I would not advocate a wholesale relaxation of the rules around any financial regulation, there are sensible prudent measures we as legislators need to take to ensure our credit union sector can fulfil its role providing a full range of banking services to its members. Now we have a Minister of State dedicated to overseeing the sector, we must revisit the legislation to rebalance the relationship between the Minister of State and the Central Bank. The Minister of State might advise if this is within his plans.

The Central Bank will remain the fully independent regulator of the sector but it should be the Minister who sets the key policies and objectives for the sector. This is crucial to the credit union movement when it comes to setting minimum reserves and capital requirements, which is proving very problematic at present. The full capital requirement issue is very complicated and too technical to go into in detail in the time allowed; suffice it to say that the limits required by the Central Bank are seriously restricting the ability of credit unions to do what they were set up to do, that is, serve their members at communities.

On the issue of levies, credit unions are subject to several even though, as financial institutions, the vast majority of them played no part in the financial crisis more than ten years ago. Some of the levies have been reduced, as has been acknowledged by the ILCU, but the deposit guarantee scheme in particular, which costs credit unions in excess of €13 million per annum although the movement operates its own guarantee scheme, is not taken into account as an area of concern.

We have an opportunity to build a more vibrant, stronger community banking force if we re-examine the legislation of 2012 and adjust it to reflect the changes in the credit union sector since that time. A stronger credit union will, in turn, lead to a stronger community. It is in our hands, as legislators, to take the opportunity to allow the credit sector to expand and strengthen to the benefit of everybody. I urge all those with responsibility in these Houses, the Department of Finance and the Central Bank to do so.