Credit Unions push for Key Changes ahead of General Election
Posted on: 17 Oct 2024
On International Credit Union Day, the Irish League of Credit Unions (ILCU) made a strong appeal to policymakers, urging the adoption of crucial reforms ahead of the forthcoming general election. The ILCU is advocating for changes that would enable credit unions to broaden their services, enhance competition within the financial services sector, and offer better choices to Irish consumers. The proposals are outlined in the ILCU’s 2024 General Election Manifesto, which details essential steps to reduce financial complexity and foster a more competitive landscape.
At the core of the ILCU’s manifesto is the proposal to update the ‘crisis era’ regulations and elevate the role of the Credit Union Registrar to increase its standing in the Central Bank and expedite the decision-making process. Prudential regulatory changes delivered in a more timely manner will increase the ability of credit unions to compete and offer a broader range of services to their members.
Other measures in the manifesto include:
- The need for stronger safeguards against financial fraud and improvements in financial literacy. Key proposals include the establishment of a national fraud database and the implementation of PPSN checks on loan enquiries to better protect consumers from fraud.
- Modernisation of the Credit Union Act to simplify regulations and support the sector's growth, allowing credit unions to provide an enhanced level of services to local communities.
- Retention of the Minister of State with Responsibility for Financial Services, Insurance, and Credit Unions.
The ILCU argues that these reforms are crucial for building a more dynamic and competitive financial market to better serve Irish consumers. David Malone, CEO of the ILCU, stressed their importance, stating, “We are at a crossroads in the Irish financial services industry. Credit unions have long been a cornerstone of communities, providing accessible, affordable finance to individuals and businesses alike. We want to do more and bring much needed choice to the market. However, outdated restrictions are limiting our ability to compete and serve more members. It is essential that we modernise regulations and enable credit unions to grow.”
Malone highlighted the restrictive nature of the Central Bank’s limitations on credit union lending, explaining, “The Central Bank continues to impose anti-competitive restrictions that no longer reflect the reality of today’s economy. Credit unions have shown they can lend prudently, but these restrictions are stifling competition and reducing consumer choice. The value of the credit union mortgage loan book has doubled in the last 18 months. We are calling for targeted changes to restrictions to allow credit unions compete and deliver more affordable financial products to our members.”
He also stressed the growing importance of fraud prevention in today’s financial landscape: “Fraud prevention is critical. We welcome the National Payments Strategy’s announcement of a national fraud database, which is urgently needed. Stronger measures, such as a Personal Public Service
Number (PPSN) check on loan enquiries, are essential to protect both consumers and financial institutions.”
Finally, Malone welcomed the commencement of the Credit Union (Amendment) Act but emphasised the need to continue to modernise it to reduce complexity and foster growth within the sector. “Further streamlining of the Credit Union Act would allow credit unions to better serve our members and play a more significant role in financial inclusion,” he added.
The credit union movement in Ireland plays a crucial role in local communities, with 190 credit unions, 3,500 staff across the country and over 2,000 non-executive directors. In 2023 alone, credit unions provided over €3 billion in loans, demonstrating their critical role in the financial services sector. However, the current regulatory framework is hindering their ability to grow and compete effectively. The ILCU believes these reforms are essential for the future success of credit unions and the financial well-being of their members.
The Manifesto can be viewed by clicking here.