Ireland South MEP, Billy Kelleher has called for urgent action by the Central Bank of Ireland to support community credit unions weather the crisis caused by Covid 19 and to continue to support their members.

The Fianna Fáil MEP was commenting after writing to the Irish Central Bank, in addition to the supervisory authorities of the Netherlands, Poland and Croatia in his role as Co-Chair of the European Parliament Credit Union Interest Group.

“Worryingly we are hearing reports in the media that credit union lending has dropped by as much as 75% compared to 2019. This is unsustainable and must be addressed urgently.

“Income generated from loans make up the majority of credit unions’ income and such a decline in loan sales will put serious pressure on some credit unions, and may force others to close or merge.

“While the government has taken far-reaching measures to support banks, the same cannot be said for the credit unions, for whom only limited guidance has been provided. This has to stop, as the credit union movement is an integral part of the Irish financial services sector especially in marginalised communities. Already we have seen some credit unions forced to close their doors.

“I have requested that the Central Bank of Ireland adopt some, if not all of the following measures to take the pressure off Irish credit unions and allow them to continue to serve our communities:

  • Afford credit unions the same flexibility as banks with regards to capital reserve requirements;
  • Grant a temporary extension to reporting deadline to allow staff to focus on their customers;
  • Allow credit unions, where appropriate, to provide select services to non-measures to support families affected by the Covid 19 crisis;
  • Ensure credit unions can access the Central Bank’s credit refinancing scheme on the same or similar terms to banks.

“Of course must maintain robust prudential requirements on our financial sector and we cannot jeopardise financial stability, regardless of how unprecedented this situation is.

“However, the more than three million credit union members in this State deserve the same protections and the same supports as the customers of banks.

“We need to see action from the Central Bank. Families and communities are financially hurting, and the credit unions can make life a lot better for them if they are given the tools to support them at this difficult time,” concluded Kelleher.