2026-05-26

146. Deputy Willie O'Dea asked the Tánaiste and Minister for Finance the way in which he is supporting the expansion of the credit union sector; and if he will make a statement on the matter. [39633/26]

Question No. 146 will now be taken by Deputy McCormack

We all know about the great work done in our communities by credit unions. In some cases, they are the lender of last resort for some people.

The Government is committed to supporting the continued development and expansion of the credit union sector, recognising, as the Deputy does, its important role in providing community-based financial services. A range of legislative and regulatory measures have been delivered and the focus now is on the development of a new five-year strategy for the credit union sector. On 19 April, I formally announced the commencement of the credit union strategy project. This programme for Government commitment will, for the first time, deliver a sector-wide approach to future-proof the credit union movement and allow the sector to address challenges and capitalise on emerging opportunities. This strategy will build on the foundations of the Credit Union (Amendment) Act and the Central Bank’s lending reforms, and will focus on establishing a shared vision and a clear strategic direction for the sector, primarily within the existing legislative and regulatory framework. The Credit Union (Amendment) Act 2023 introduced significant reforms aimed at strengthening and modernising the sector and broadening the range of services available to members. Key measures include loan referrals, loan participation and provisions relating to the establishment of a corporate credit union. Amended lending regulations, which commenced on 30 September 2025, significantly enhanced the lending capacity of credit unions. The regulations increased the lending limits to 30% of total assets for mortgages and 15% for business loans, thereby enabling credit unions to expand their offerings and compete more effectively in these markets. Based on sector assets of €22.5 billion at the end of 2025, these changes permit up to €6.8 billion in mortgage lending and up to €3.4 billion in business lending.

I thank the Minister of State for his response. As I said earlier, credit unions already play an enormously important role in communities, with millions of account holders across Ireland and a very high level of public trust. Following the departure of a number of retail banks from the Irish market, there is clear need for greater competition within the banking sector. One of the most significant opportunities for expansion is in mortgage lending. While credit unions currently account for only 1% of the mortgage market, the sector has ambitious plans to expand substantially in this area, potentially up to €10 billion in mortgage lending over time. Greater competition in that space would be hugely positive for consumers and could help place downward pressure on mortgage rates. Does the Minister of State agree that supporting the responsible expansion of credit union mortgage lending represents a significant opportunity within the Irish banking market?

I could not agree more. Certainly, since my appointment, I have been struck, as I go around the country visiting different credit unions, just how in tune they are with their members' needs and how ambitious they are to meet the enhanced needs of the communities they represent. That is why the amended lending regulations, which came in on 30 September last year, offer a huge opportunity to the credit union movement to really compete in the mortgage sector and in the SME lending sector. As I work with the sector to develop a five-year strategy, I am engaging in a series of consultation events with the credit union movement to see what more we can do to ensure we put this critical financial institution on a long-term sustainable footing for the next five years.

I thank the Minister of State. Credit unions have also been given greater capacity to grow, as he said, including the ability to lend over 30% of their assets in long-term lending. However, business lending still remains a relatively small part of the overall market, with approximately €190 million currently in SME and business lending. There is clearly potential for further growth in this area, as the Minister of State said, particularly for small businesses and local enterprise seeking relationship-based finance. At the same time, one of the real strengths of the credit union movement is that while credit unions continues to modernise and adopt new technologies, people can still walk into a local branch, sit down face to face and discuss financial matters with someone who understands their circumstances but also, most important, understands the community they come from. Does the Minister of State believe there is scope for further support, collaboration and shared service models within the credit union movement in order that the sector can continue expanding responsible while maintaining that trusted local presence?

The credit union is an extremely trusted financial institution. In fact, for ten years in a row the credit union movement has have been awarded the ranking of the most reputable brand. There are huge opportunities based on the very trust its members have in its service. We have already seen that the amended lending regulations has given credit unions opportunities in both the mortgage space and the SME lending space, and there is an appetite there to exploit the opportunities that exist. I have been very strong in requesting the participation of the local enterprise offices and the chamber of commerce representative bodies, as I go around engaging with various regional workshops, to ensure we hear from business representatives to see what type of products they require so that the credit union can fill that gap. There are great opportunities there. There is an ambition by the credit union movement to exploit those opportunities and I want to help it to make sure it does just that.