With announcements in recent weeks about Ulster Bank withdrawing from Ireland and Bank of Ireland closing branches, there is an opportunity for the thriving credit union and post office networks. In Donegal, Ulster Bank is closing five branches and Bank of Ireland is pulling out of another five towns. I have talked to a number of local credit unions across Donegal and they are seeing an increase in people moving their deposits to those credit unions. However, credit unions are hamstrung by regulations on deposits, which sees them limiting deposits because they are forced by Government policy to make a loss in the context of holding people’s money. This was to shore up the balance sheets of banks during the crash and now continues to facilitate the banks to the detriment of credit unions. It is as if the Government has something against people exercising control over their own decision-making, especially when it benefits communities directly. Credit unions need to be able to lend out to communities the money they take in. That is how it works.

Since the enactment of the Credit Union Act 2012, credit unions' cost base has risen dramatically from less than 20% of their total income then to more than 80% now in some cases. There are also reports of increasing and ongoing pressure from the Central Bank to add even more regulatory compliance staff and costs. These costs are unsustainable and will put many local credit unions out of business.

Staff of the Central Bank are not accountable to any body or agency for their actions. I am told that credit unions need legislation appropriate to their members' changing needs. Currently, all responsibility lies with credit union directors and CEOs to develop and deliver services to members, and rightly so. However, the Central Bank then has the authority to block, frustrate or veto any such services or initiatives. I am told that, in effect, credit unions have been given the responsibility to deliver those services with zero authority to do so. The feeling in some credit unions is that the Central Bank favours banks and that it is intent on building up the profits of the banks while embedding regulatory costs which reduce the surplus of credit unions. Apparently, the Central Bank has indicated that every credit union should expect that members will not be paid a dividend or interest rebate for the year 2020. There has been a reported exodus of experienced volunteers from credit union boards because of what is deemed to be relentless, restrictive and excessive governance regulation by the Central Bank. It is feared that if such micromanagement continues many small-medium sized credit unions will be lost in the next few years.

I have also recently highlighted the stark housing problems in Donegal. Credit unions have been offering a viable solution for investment in social housing for years but a decision from the Department is still outstanding. It is not as if there is any urgency in addressing the housing crisis, I suppose.

Bank of Ireland has organised an exclusive contract with An Post. However, credit unions are not allowed to explore the possibilities in this regard. Will the Taoiseach now expand the remit and autonomy of credit unions? Credit unions are member-owned and have been the lifeline of a large number of communities over many years. Why would he allow the Central Bank to squeeze some credit unions out of some localities? What will he do to stop that?

As a lifelong member of the credit union movement, I am strongly supportive of any measures we can put in place to support credit unions and the role they play in communities across the country. The credit union movement has made a distinctive and outstanding contribution to Irish society and has enabled many working families to progress in life because of the service that credit unions have provided.

I understand the basic thrust of what the Deputy is saying with regard to the perception of credit unions vis-à-vis the Central Bank and the regulator. That is not something that began today or yesterday, it is an ongoing perception and sense that credit unions have. On the other side, regulation is important. Regulation is there to protect the public, members of credit unions and people in general. Getting the balance right is the issue.

The Ministers concerned will continue to focus on this matter in order to see if we can facilitate greater capacity for credit unions to provide services over and above those they currently provide. I am very aware of the current difficulties and challenges, with very significant deposits, significant costs, some of which are regulatory embedded costs, and real difficulty in the marketplace in terms of getting a return.

In the context of housing, my understanding is that it has not all been one-sided traffic and that there needs to be a meeting of the ways in respect of this issue and the utilisation of some of the resources credit unions have in terms of their availability for social housing and financial support for the provision of housing more generally. That is an issue the Ministers for Finance and Public Expenditure and Reform have been working on for quite some time.

In the context of Ulster Bank's decision and the decision of Bank of Ireland, there are real issues there for towns the length and breadth of Ireland, for rural areas, particularly in the context of Ulster Bank, and for the Border region and the north west.

In the context of the post offices, a number of Ministers are working together to see what we can do to underpin and strengthen the post office network in terms of the consolidation of Government offline services and determining the degree to which we can utilise that network in towns across the country to support Government. The latter would, in turn, be of benefit to post offices in terms of financially underpinning them and giving greater stability and sustainability to the network.

The world is changing, as is the world of banking. The Government, along with local communities, needs to engage in finding new ways to inject new life, activities and services back into towns. That is something on which we are very focused.

I thank the Taoiseach for his response. I know he is involved in and supportive of the credit unions. However, it is about getting the balance right. I do not believe we have ever got the balance right. It has all been geared towards the banks. Even in his response, the Taoiseach talked about building up the post offices but it is building them up to provide bank services for Bank of Ireland and Ulster Bank. Why are we not building them up to provide for services for our communities? That is vitally important.

While it is important that the Government has an independent body, namely, the Central Bank, to regulate the credit unions, we can set the agenda in terms of how it goes about that. That is very important and we need to do that. For example, the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach reported that the common bond structure is essential for the credit union movement. Why can all credit unions not introduce debit card services and build their services in that way?

The industry funding levy is to be increased in stages up to 50% by 2022 but the Irish League of Credit Unions highlighted in 2020 that this is "a tax on social capital and a levy on volunteers". We could reduce that also. That is what we should be doing to encourage credit unions to develop.

First, it is a valid point to make and to pose the question whether we have the balance right in respect of the relationship between the credit union movement and the regulator and the range of services that credit unions are permitted and not permitted to provide. It is a fair point and one that requires continued focus and reflection, and some action taken on it also. I accept that point and the Government will engage on it.

Second, in terms of the post offices, the Deputy may not have picked up on the final point I made relating to that. It is not just about banking services provided through post offices, it is about Government services provided through post offices and whether there is additionality in that respect, particularly in terms of offline Government services, to allow us to enable and utilise the post office network to provide additional services of that nature to the public in locations across the country. That is something the Government is considering. The Cabinet discussed the matter during the week. As already stated, the world is changing and the world of banking is certainly changing and technology is having an impact. We need to redefine the range of services and the level of Government supportive intervention in towns across the country.