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Irish League of Credit Unions welcomes publication of the Retail Banking Review

Posted on: 29 Nov 2022

The Irish League of Credit Unions (ILCU) welcomes today’s publication of the Department of Finance Retail Banking review 2022. In particular, we are pleased with the acknowledgement and recognition of the significant role credit unions play in the Irish banking landscape recognising that they have “a strong and trusted brand, are present in communities throughout the country, and have been developing their product offering”. The Review Team believes “that credit unions could play a greater role in the provision of retail banking products and services in the coming years.”

Commenting on the findings and recommendations in today’s report, ILCU CEO David Malone said, “I am encouraged by the progressive tone of today’s report and the recognition of the role that credit unions are currently playing, and can continue to play, in the retail banking market. The ILCU have been working with, and on behalf of, our credit unions in collaboratively developing products and services aimed at providing alternative banking choices for Irish consumers. Nearly half of credit unions in Ireland now offer current accounts and internationally recognised debit cards and this number is increasing weekly. The credit union sector has over 40% market leading share of the personal lending market and continues to increase its presence in the mortgage and SME lending markets. Credit unions are already the de facto community bank, a point alluded to by the Banking Review Team, in their recommendations”.

The Review Team, in considering whether there is a need for a state-owned public bank in Ireland, noted the findings of previous Government commissioned reports, and concluded “that the credit union sector, building on the policy proposals approved by the Government in July, should be given the opportunity to transform into a community-based provider of universal retail banking products and services. In this role, the Review Team believes that the sector has the capacity to provide additional competition, at scale.”

David Malone concluded, “I note the comments of the Review Team that the transformation to a community-based provider “will require strong leadership and collaboration within the sector to implement the significant business model change required to deliver scale efficiencies, leverage the necessary expertise in a cost-effective manner and to develop greater standardisation across the product range”. The ILCU, working with the other representative bodies, will not be found wanting when it comes to providing this leadership to the credit union movement. However, the credit union sector will also need regulatory change that facilitates, and does not inhibit, this evolution of credit unions’ service offerings”.  The publication of the Credit Union (Amendment) Bill by Minister Sean Fleming tomorrow is a first step in this transformation.