Ms Selina Gilleece:

I thank the committee members for giving us the opportunity of addressing them. The Credit Union Managers Association is the representative association for professional credit union managers in Ireland. Our membership comprises approximately 260 credit union managers. The function of the credit union manager is to work at the coalface with credit union members on a consistent daily basis and to liaise with our voluntary boards. As Mr. Kevin Johnson has already indicated there is a very strong and healthy relationship at the moment between credit union managers and credit union boards of directors which we would like to see continue.

The Credit Union Managers Association felt there was an absolute need for new legislation on credit unions. We are acutely aware of the difficulties credit unions are experiencing in the current economic environment. Much of the discussion in the past two days has centred on what I would consider to be minute matters considering the major difficulties for all financial institutions and, in particular, credit unions. Mr. Kevin Johnson alluded to the forthcoming personal insolvency legislation and its potential impact on credit unions.

Credit unions have sustained themselves throughout the economic storm the country has faced in recent years. It is a credit to the volunteers and the credit union members and staff that we have managed to do that. However, we are by no means perfect. It is commendable that credit unions are still lending and have not sustained the levels of losses of other financial institutions. However, it would be remiss to say we are perfect - we are not perfect and have our faults.

In September 2010 the Registrar of Credit Unions said that without proper systems of accountability, risk management and control, credit unions would continue to struggle to meet the demands of an increasingly sophisticated member base in which they operate. In most cases, problems arising in credit unions can be traced back to poor governance. Historically where there are problems in credit unions in many cases those problems have been caused by poor governance. We are delighted the draft Bill reflects the commission report's recommendations on proper governance. As a credit union manager representing credit union managers, I can say that we believe all aspects of the draft Bill reflect the changed economic environment and increased levels of regulation, and that it is balanced and proportionate.

I have some concerns over some of the comments about the proposed tier structure for credit unions. Members should recognise that the tier 2 structure for the €10 million to €100 million-credit unions will not change how we are regulated at present. It is important to clarify that point because people might be under the impression that if the Bill is introduced all sorts of weird and wonderful things will happen in regard to regulation. We are being regulated and will continue to be regulated in regard to tier 2 credit unions. As Mr. Johnson has said, tier 1 credit unions with low risk levels might be regulated less severely which is positive. Obviously it is important from a prudential perspective that credit unions with an asset base in excess of €100 million should have stronger regulation. Credit union managers have no difficulty with that.

The other aspects of the Bill have really not been discussed in the past two days. They deal with matters such as the central rulebook. We welcome this because it provides clarity to us when we are doing our jobs. In order to find out what is wrong with the HSE it is necessary to ask the nurses and doctors, who are doing the job of dealing with patients on a daily basis. We are dealing with members who are under severe financial difficulty and we are acutely aware of these difficulties.

We welcome the fitness and probity regime. We believe it is appropriate for credit union volunteers, managers and staff to have the appropriate skills, capacity and competency to look after members' money. Protection of members' money is the most important thing.

I will deal with the role of the manager. We welcome that the function of credit union managers is being recognised as separate from that of the board. I wish to clarify any ambiguity as to why these changes are being promoted. The commission's report recognises that the manager and staff are responsible for the operation of the credit union on a daily basis. The board is responsible for the governance and future strategy of the credit union. It is important to have clarity on those two distinct roles and we welcome those changes.