Mr. Kieron Brennan:

The Irish League of Credit Unions participated fully in the commission process which, like the current legislative process, was subject to a timetable set elsewhere. There was a time imperative which, to some extent, influenced the outcome in one shape or other.

Deputy Michael McGrath is correct in stating our concerns are limited to what one might call two narrow ranges of issues. One has to do with governance issues and the other with what we would see as omissions of matters which in some cases appear in the report but are not necessarily reflected in the legislation. We are focused, on the one hand, on inappropriate reflection of the commission's report and, on the other, omissions. We have come here today to state that credit unions are stepping up to the plate, that there is a significant change and restructuring agenda and that we need to make it work, but credit unions need to be appropriately equipped and enabled to do this. For example, term limits and prohibitions would run contrary to a number of objectives set out in the commission's report. In a number of instances the commission has made a number of points along the lines, for example, that the volunteer principle should be protected and promoted, but when one looks at a number of the issues in detail, they are undermined to some extent. Most of the individual items could be argued for to make sense on their own, but when one looks at them in the aggregate, particularly for the smaller credit unions, they undermine the voluntary ethos of credit unions. In terms of the omissions, I do not wish in any way to cast aspersions on the good work done by the commission and the contents of its report, but there was considerable pressure to operate within a given timeframe.

On tiering, those of us involved in the league have considerable experience of the arrangements in the United Kingdom. We have responsibility for representing the majority of credit unions in Northern Ireland which earlier this year were made subject to the same regime which has been operated in Britain for quite a few years. There is a two-tier arrangement in Britain where there are version 1 and version 2 credit unions. The way that it operates is that a credit union makes a decision on the type of services and their level of sophistication and the level of risk it wishes to carry. For example, it could state it wants to be a simple credit union providing only for savings and loans and, therefore, in the lower tier of regulation, or it could wish to be a more sophisticated one providing the complete range of personal financial services for its members, in which case it will need to be in the higher level of regulation. We say do it on that basis, but that relationship between risk, sophistication of offering, products and regulation is missed in this proposal which is simply based on asset size alone. One could, for example, have some large credit unions offering limited services and, likewise, some modest ones offering quite complex products. There needs to be a reconfiguration of the tiering arrangements to reflect risk and product offerings in credit unions.