DUBLIN, Ireland–A new report on Ireland’s credit unions says the movement has the capacity to survive and flourish into the future, but change must be part of that process.
The Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach published its report on the Review of the Credit Union Sector. Taoiseach refers to the prime minister of the Republic of Ireland.
The report said the credit union movement is facing several challenges including expanding its loan offerings, attracting a younger and broader customer base and securing additional and diverse investment opportunities, according to RTE.ie. The movement must also formulate a strategic plan and blueprint that sets out a vision for the future operations and long-term sustainability of the sector, the report adds.
One of the Committee's key recommendations was that credit unions be "empowered" to contribute to alleviating the current housing crisis in the state, RTE.ie reported.
"Serious consideration should be given to enabling credit unions to utilize their substantial assets to lend to approved housing bodies and help alleviate the housing and homelessness crisis," the Committee stated in the report.
The report calls for a review of the legislative framework and regulatory requirements applicable to the credit union sector should occur to ensure that they are fit-for-purpose and proportionate in the context of the post economic crisis period.
The report notes that the current average loans-to-assets ratio among Ireland’s credit unions is just 26% and is an issue of “serious concern in terms of the future viability of the credit union movement.”
"The figure should at a minimum be in the 40-50% ratio range and on that basis the Committee recommends that the issue be addressed by all stakeholders as a matter of urgency," the report states.
The Committee has also recommended the implementation of a tiered regulation of credit unions. It said this will ensure a proportionate application of the regulations and will take into account the individuality and diversity of credit unions within the broader movement, RTE.ie reported.