Finance Committee of the Riigikogu
Lossi plats 1a
15165 Tallinn
Estonia
By email only:
[email protected]
Cc: Prime Minister of the Republic of Estonia Mr. Kristen Michal
By email:
[email protected]
Cc: Finance Minister of the Republic of Estonia Mr. Jürgen Ligi
BY email:
[email protected]
Concerns about the draft Savings and Loan Associations Amendment Act
Dear Esteemed Members of Finance Committee of the Riigikogu,
The Irish League of Credit Unions is a representative body for Credit Unions on the island of
Ireland. Credit Unions which I understand are called “oiu-laenuühistud” in Estonia, are an
essential component of the financial services industry in Ireland.
I understand the proposed Savings and Loan Associations Amendment Act will prevent new
members from joining a credit cooperative and impose restrictions that will strongly restrict a
credit cooperative from operating and providing services in Estonia. This would in our view be
a retrograde step and I am writing to highlight our concerns about this proposal.
Credit unions play a vital role in the financial ecosystem, offering inclusive, ethical, and local
solutions. Supporting them fosters healthy competition, enhances consumer protection, and
enables community-driven financial access.
Ireland is an example of one of the most successful credit union systems globally,
demonstrating how robust regulation and community focus can create a thriving cooperative
sector. Credit unions are the largest provider of unsecured personal lending in Ireland with
approximately 50% market share. We provide essential competition and are a growing force
in housing loans.
Our experience demonstrates that a well-regulated, community-owned cooperative model
can scale responsibly, deliver financial inclusion, and bring meaningful competition to
dominant banking providers. In the Irish context we see credit union provide benefits in five
key areas namely;
1
a) Financial Inclusion
By offering accessible, trustworthy services like personal loans, credit unions bridge gaps for
underserved populations, fostering inclusion and resilience, especially in rural and smaller
communities where big banks have withdrawn or where the profit motivation isn’t as strong.
b) Systemic Stability
Credit unions display counter-cyclical behaviour during downturns and provide localised
stability by recycling members savings. Cooperative models reduce systemic risk and
empower communities with financial control. The Irish Government’s bailout of the domestic
banking system has cost approximately €32 billion1 whereas the credit union sector cost
nothing despite significant restructuring.
c) Enhanced Competition and Consumer Choice
Credit unions provide meaningful alternatives to the banks, particularly for personal lending,
mortgages, and current accounts. In Ireland two foreign banks withdrew from the market in
2021 leaving2 1.2 million account holders requiring a change to their banking providers. Credit
union were first established in 1958 in Ireland and have a long history of providing credit in a
prudent manner.
d) Consumer Protection and Trust
As member-owned entities, credit unions prioritise member welfare over profits. Surpluses
are reinvested into services, education, or returned to members, fostering transparent, ethical
financial conduct.
e) Well regulated and supervised by the Central Bank of Ireland
Credit Unions in Ireland are well regulated and intensively supervised by the Central Bank of
Ireland. Domestic legislation, combined with domestic regulations and European legislation
applies to Credit unions.
By way of conclusion our view is that Estonia can benefit by enabling credit unions to operate
and grow;
• Boost financial competition;
• Enhance consumer protection and trust;
• Strengthen local communities and SMEs;
• Promote financial inclusion and resilience.
1
How much did the bank bailout cost taxpayers?
2
Overview of Account Migration activity and Final Statistics
2
The Irish example above illustrates how, with the right legislative framework, credit unions
can deliver robust financial performance, modern services, and social value. If there are any
further clarifications required please don’t hesitate to contact me at the details below
Best wishes
____________
David Malone
Chief Executive Officer
Irish League of Credit Unions
3
Saatja: "Harrington, Barry" <
[email protected]>
Saaja:
[email protected]
Teema: ILCU letter on draft Savings and Loan Associations Amendment Act
Kuupäev: 2025-09-04 16:17
Tähelepanu! Tegemist on välisvõrgust saabunud kirjaga.
Tundmatu saatja korral palume linke ja faile mitte avada.
Dear Esteemed members of the Finance Committee,
I attach a letter from the Irish League of Credit unions highlighting our
concerns about the potential implications of the draft Savings and Loan
Associations Amendment Act.
Credit unions in Ireland provide much needed competition to a highly
concentrated banking sector and our experience demonstrates that a
well-regulated, community-owned cooperative model can scale responsibly,
deliver financial inclusion, and bring meaningful competition to dominant
banking providers.
I am happy to discuss this matter in greater detail if you wish
Best wishes
Barry