20 April 2021
By Tom Collins
A new approach to Ireland’s banking and mortgage market should be examined using the large untapped potential of credit unions across the country, Fine Gael TD Michael Creed has said.
Deputy Creed made his comments following the recent announcement that KBC Group is exiting the Irish market, which he described as a further blow to competition just eight weeks after the departure of UK lender NatWest and its Ulster Bank unit.
Deputy Creed said: “Whilst the immediate issue should be on assurances for bank staff and customers, there is a broader strategic concern for competition in the Irish financial services market, which includes the mortgage market. This exodus leaves just three retail banks in the country, narrowing the choices for consumers and detrimentally effecting the functioning of the financial system.”
Deputy Creed is calling for the Department of Finance and Central Bank of Ireland to examine regulations that restrict credit unions’ ability to participate fully in the Irish mortgage market.
“I believe our credit unions are a sleeping giant with the potential to overhaul the Irish mortgage market. With 326 branches and 3.6 million members across the country, Ireland has one of the highest numbers of credit union members per head of population. Yet there is untapped potential. There is a total of circa €14.8bn savings in our credit unions, but just circa €4.9 bn in loans.”
Deputy Creed pointed out that integrating credit unions into the mortgage market could also allow a community banking sector to flourish.
“In addition to the competition benefits it brings, examining how we could expand credit unions lending opportunities would act as a cushion against the drawbacks of more footloose international banks.
“Being imbedded in our communities, credit unions offer a more secure alternative of reward, flexibility, and employment for savers, prospective homeowners and employees.”