Dublin South West Sinn Féin TD, Seán Crowe, has said his concerns over Central Bank proposals to cap the amount of money that a saver can place in a Credit Union has been vindicated by a Government commissioned report that says the organisation has seen a steep decline in their loan book. Crowe said that many of the Government’s new proposals favoured the banks and failed to take into account the concerns of the Irish League of Credit Unions.

“Irish Credit Unions have seen their loan book shrunk by 45% over the last eight years with much of it down to the financial crisis. Total income across credit unions fell from 562.4 million last year from 860 million in 2007.

“New changes adding further lending restrictions by the Central Bank have also impacted on their viability and competiveness according to a new just published government commissioned report.

“The report indicates that the fall may also have been stimulated by the new Central Bank restrictions that put a cap on the amount credit unions can lend to individuals and various types of businesses including that no more than 30% of loans be for a period of more than 5 years and which seriously undermines their competiveness against the Banks and other lending institutions.

“Many people expressed concern that the regulatory action, among others, by the Central Bank, and legislation from Government, would not adequately respect the unique ethos of the Credit Union movement and this government report would appear to vindicate this position.

“Many of the restrictions put on the Credit Union movement are discriminatory and clearly puts them at a disadvantage and needs to be addressed.

“Credit Unions are democratic and very well run. Only a tiny minority have had problems and these pale in comparison to the fallout from the reckless actions of other lending institutions

“They are also sadly in many cases the only legitimate institution or place that people on low and middle incomes can access a loan.

“I believe that the Credit Union plays a unique social and economic role in Irish society that requires the ongoing support of government and the Central Bank.

“The Credit Union sector requires and I believe demands clear and sensible regulation but implemented in a consistent and fair manner which reflects its unique model and role.

“This newly commissioned government report also requires action and the Central Bank recommendation on lending limits needs to prioritised immediately in order to create a level playing pitch for credit unions and their members. “