Michael Kitt (Galway East, Fianna Fail)

I am sharing time with Deputy Chris Andrews.

I very much welcome what the Minister has done in this Bill and I am aware that it is part of a package of legislative measures to amend and update the Irish deposit guarantee scheme. While I welcome the increase in the deposit guarantee scheme for banks and building societies from €20,000 to €100,000 for eligible depositors and institutions, with effect from 20 September 2008, I also welcome the scheme as it applies to credit union savers. These measures are very important. While previous legislation applied to the seven covered credit institutions, the deposit guarantee scheme applies to all authorised credit institutions in the State, including credit unions which have not benefited heretofore from statutory deposit protection.

In many of my comments I will refer to the credit union movement. In fact, people involved in the credit union movement to whom I spoke did not raise the issues about which other Deputies have talked. One of their concerns was on making representations to the Financial Regulator to relax the requirements of section 35 of the Credit Union Act. Their query was on the loan book and particularly the question of the 20% limit on loans greater than five years. Many credit unions are making representations to the Minister and Financial Regulator on that issue and I hope we will get some progress on it. The credit union movement members say they have options of restructuring the debt, which would put them in breach of section 35, or accepting the reduced borrowing, which will allow arrears to escalate. It is important we see a change in that situation whether by legislation or guidelines from the Financial Regulator.

One of the reasons this has been raised is the importance of the credit union movement. Deputy Sherlock referred to this. One of the difficulties we have in many parts of the country, particularly in rural Ireland, is that for many years even when the economy was in very good shape, financial institutions were closing down throughout the country. Some branches in Dublin and other cities and large towns closed, but most of the closures were in rural areas. Very little publicity has been given to these closures. Local banking services are very customer friendly and have the market intelligence one needs.

It is disappointing to see these closures. Even a mobile bank in Connemara was closed down some years ago. The problem of banks giving out outrageously high mortgages in the past would not have happened if we had more banks available throughout the country. Three years ago I was part of a campaign to persuade the Bank of Ireland to stay in Glenamaddy, County Galway. It was not a successful campaign and Bank of Ireland customers were told to go to Castlerea in County Roscommon. A similar situation happened in another town near where I live in Mountbellew where Allied Irish Banks had a three-day service and then decided to withdraw from the area. These are the situations that put more pressure on credit unions.

I am glad these issues have been addressed in this Bill and that many Deputies have raised them in the House. This is about people having access to banking. If one is to talk about savers, one needs access to banking. The Minister probably knows that in recent times Permanent TSB proposed to close 48 agencies throughout the country, of which eight were in County Galway. When the final decision was made, three branches remained in Galway city and none was left open in the rural areas. An opportunity for savers was gone and the people who owned these premises and provided the agencies put money into providing and refurbishing offices but unfortunately their work was not recognised by these bodies. The outcome of many of these decisions is unemployment. They cannot blame the recession for some of these decisions. Financial institutions are making money. Unfortunately, they would probably say they are not making enough money and that is what it boils down to.

I hope the Minister, through the good people he has on the various institutions can, as well as examining the difficulties people have with loans and savings, also look at closures. ACC Bank's decision to close 16 of its offices nationwide was taken following very little discussion. We probably regret now that we did not have ACC Bank and ICC Bank coming together as State banks in the past when they were moving into other areas. In Tuam, seven jobs will go because ACC Bank is moving to Galway city. The places not affected by the closure of 16 branches around the country will be Galway, Cork, Dublin, Drogheda, Kilkenny, Limerick, Mullingar, Sligo and Waterford. These are fairly large centres and will not suffer but other parts of the country will.

I have written to many of these institutions, including Permanent TSB and ACC Bank, asking why they are carrying out these closures. Banks have made profits. Rabobank was in profit last year. I have received very little response to my representations on trying to keep agencies open. That is why I am raising it in the Dáil. The usual response has been that I should go to my local credit union. That brings us back to why we are putting emphasis on the credit union movement. We are dealing with credit union savers.

I appeal to the financial institutions to be customer friendly. It is very arrogant to say one is closing down an agency and that customers can go to Galway city or the nearest large town. Let us remember those who have no access to public transport who were very happy to deal with a local agent or bank regarding their savings and who, unfortunately, are finding some of these agencies are closing down.

I wish the Minister well with this Bill, which is one of two Bills he will introduce in this area. I hope we reach a situation where more branches are available and we hold the branches we have rather than seeing continual closures and withdrawal of services for those who are keen to have savings. Many of those savers are elderly people who would like to deal with agencies and banks in their own localities.

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