Michael Noonan (Limerick City, Fine Gael)
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The Irish League of Credit Unions and its representatives, including its manager, has had ongoing contact with the officials charged with developing this Bill and considering amendments. I am of the view the league is more satisfied with the position now than it was when the initial correspondence was entered into with Deputies from all sides. The league still has some concerns and I hope we can deal with those concerns as we go through the Bill.

For example, some people have suggested we delete the definition. I can give two examples of what the effect would be if we deleted the definition. First, section 18 inserts a new section, 55(A)(f) into the Credit Union Act 1997. This requires the Chairman to conduct a performance evaluation of all directors regarding their compliance with obligations under financial services legislation. Many credit unions are authorised under the European Communities payment services regulations 2009. A director of a credit union who fraudulently misappropriates users' funds under these regulations commits an offence. However, if these references were deleted in the Bill, that offence could not form part of that director's performance evaluation.
Second, section 15 of this Bill substitutes a new section 53(7) in the Credit Union Act 1997. Deleting this reference would mean the Bill would allow a retiring director to be eligible for re-election, even where to do this would result in a breach of another legal provision which already applies to the credit unions. For example, there are requirements on directors regarding fitness and competence under the Investment Intermediaries Act 1995, under which many credit unions hold an authorisation. The failure of a credit union director to meet these requirements would be grounds for an application to the High Court to remove the credit union's authorisation as an investment intermediary. Including the reference to an applicable requirement under financial services legislation means that credit union members can have confidence that the directors coming before them for re-election are not doing so in a way which would breach a legal requirement to which the credit union is already subject.

Some people have suggested we should include the phrase "where relevant or applicable" to provide for how these would apply. The approach used in the Bill has been subject to careful consideration and scrutiny by legal advisers of the Department of Finance, the Central Bank, the Office of the Attorney General and the Office of the Parliamentary Counsel. The wording has been chosen carefully to ensure that it serves its purpose as an interpretation provision, but no more than an interpretation provision. My officials have explored with the Office of the Attorney General where some additional wording might be used to clarify that these provisions are only to be interpreted where applicable or relevant. The change suggested would not alter the meaning or interpretation of these provisions. Furthermore, the use of the term financial services legislation throughout the Bill must be read in the context where it is already accompanied by a reference to applicable requirements. It is important that in adding any words for clarification purposes, the intent and meaning and purpose of the provision is not inadvertently compromised.

Another question which might arise might suggest we should just list the legislation that does apply. The Department has explored this option with the Office of the Attorney General and the assessment is that this approach would introduce unnecessary risks to the robustness of the provision and could result in a more limited application of the Bill than intended. The interconnectedness of financial services legislation is such that any inadvertent omission or misapplication of a particular provision could impede or prevent key sections of the Bill from applying in their intended form. Furthermore, this approach would not address the situation whereby credit unions operate in areas of business beyond the current statutory provisions that apply. Credit unions already typically hold authorisations under three or four regimes and any further authorised activity would fall outside of the definitions. Such avoidable risks need to be reviewed against the fact that no amendment to the meaning of the provisions is being sought.

I could provide more information on specific issues that have been raised, but committee members probably want to participate. I will come back in on this again.