Peter Mathews (Dublin South, Fine Gael)
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Congratulations to everybody involved in building up such a base for a democratic and voluntary movement. Credit unions meet many of the financial needs of individuals and households at a micro and medium micro level.

The legislation arises out of the commission's work on the difficulties that have emerged as a result of a general financial meltdown, mainly bank driven. The reality is that there are financial strains on some credit unions around the country. Am I correct, that many credit unions require financial support as a result of the overspill of general financial difficulties and meltdown? We are trying to create a framework that is well balanced in terms of addressing the type of risks and responsibilities of a voluntary and democratic-based movement in order to allow it continue into the future. The regulation, in the form and framework presented, seeks to address those real needs going forward.

The tiering system for categorising the type of operations in the credit union movement is a good idea. There can be large volumes of simple transactions which result in big balance sheet amounts or complicated financial transactions in smaller numbers in total aggregate smaller amounts. The risks for the second type in terms of dealings in financial products are more difficult to manage and usually have magnified consequences if they go wrong. As such, they require tighter controls and disciplines. I agree that if one can come up with a framework to match the realities of the two groupings of services provided that should be adopted.

I would like now to put to the witnesses some nuts and bolts-type questions which I was asked by constituents to raise with them. Given some credit unions are under greater strain than others does the Irish League of Credit Unions expect many mergers to take place? In regard to losses incurred prior to rescue of a credit union, who pays for those losses? Will it be the rescuer's members, rescued members or taxpayers? The constituent who asked that question anticipates that rescuer's members will pay for them. What will happen to the savings protection scheme fund under this legislation? What exposure does the savings protection scheme have given the number of letters of comfort that have issued? Given regulatory control and ability to rescue credit unions in difficulty no longer rests with the league what future role is envisaged for the ILCU? Will the savings protection schemes veto not inadvertently select against credit unions in favour of the larger creditor banks where such a situation obtains?