Credit Union lending restrictions a blunt instrument – Doherty
Sinn Féin finance spokesperson Pearse Doherty has today described lending restrictions placed on Credit Unions by the Registrar of Credit Unions as a “blunt instrument that will push families into the hands of money lenders.”
He made his comments during a Dáil debate on the Central Bank and Credit Institutions Bill.
Deputy Doherty said:
“More than 50% of Credit Unions across the state have had lending restrictions imposed on them by the Registrar of Credit Unions. These restrictions have been imposed without any clear rationale, criteria or consistency.
“As a consequence, financially sound Credit Unions are unable to extend loans to long-standing customers who, in the view of their local Credit Union manager should be granted a loan.
“These restrictions are a blunt instrument that risk damaging both the Credit Union movement and the many thousands of members who depend on their Credit Union loans throughout the year.
“The regulator has a responsibility to regulate. However his job must not descend into micro-managing the individual lending decisions of individual Credit Unions. Where lending restrictions are applied they must be based on clear criteria and be applied consistently.
“I am also concerned with some of the confusing information that has found its way into the public domain in recent weeks with regard to the Credit Union movement.
“Credit Unions provide an invaluable service to millions of individuals across the country. They are rooted in our community and in many cases allow families to manage their increasingly finite resources.
“Claims made by the Minister for Finance last week in the Seanad to the effect that Credit Unions were in need of recapitalisation funds of between €500 million and €1 billion has caused alarm are unhelpful. Such comments run the risk of unsettling credit union members and creating negative consumer confidence.
“I understand that only a very small number of credit unions will need financial assistance and will need to be dealt with immediately.
“The broader issue of restructuring and regulating credit unions must be left to the Commission on Credit Unions and the Oireachtas, without unnecessary interference from the Registrar of Credit Unions. The financial position of a very limited number of small credit unions must not be used by the regulator to impose an agenda on the credit union movement that is not in keeping with its community bond and not for profit ethos.”