Minister for Finance Michael Noonan has been accused of damaging credit unions in favour of bolstering Ireland’s banks over his plans to restrict mortgage provision.

Independent MEP Marian Harkin made the claim responding to indications that the minister would deny credit unions the right to provide mortgages and initiate other measures that would restrict their growth.

“This minister, the Department of Finance and the Central Bank, instead of valuing the stability shown by credit unions during the economic crisis caused by the banks, have produced new measures to prevent them from developing their vital role as the people’s bank, and this is both morally and financially unacceptable,” she said.

Calling on the incoming Central Bank governor Prof Philip Lane to initiate an immediate review of its policy towards credit unions, Harkin noted that they “are being increasingly restricted in providing services throughout community as the banks increasingly desert them.”

Despite what she described as deliberate Government action to undermine the credit union movement, such moves had failed to undermine people’s confidence in the institutions, the independent MEP said.

“Minister Noonan and his Government, if they have any real concern to meet the demand for housing, must not deny access to mortgages from credit unions which can have a major impact on resolving the housing crisis,” added Harkin.