Pat Rabbitte (Dublin South West, Labour)

I support these amendments, particularly Nos. 10 and 55, which are in the name of my colleague, Deputy Burton. The danger is that because of the catastrophe which has befallen us due to blind-eye regulation we will now swing 180 degrees the other way. The amendments introduced by the Minister, Nos. 35a and b, were an afterthought. Somebody said, "We are restructuring regulation dealing with reform in the Central Bank and the regulator - my God, this is our chance to include the credit unions". Notwithstanding that a strategic review of credit unions is under way the opportunity was taken to include the credit unions in this fashion. The danger is that unless this is very carefully calibrated it could undermine the very ethos of the credit union movement. If one takes for example the matter of the provisions that might be imposed in respect of additional provisioning, that could obviate the payment of dividends at the year end, an essential part of what the credit union movement is about.

One might consider the terms used in the Bill about a "class" of credit unions and the capacity of the regulator to intervene in terms of a class of credit unions. As I understand it, a class of credit unions refers to any common characteristic that might exist. For example, a particular job-based credit union might have got into difficulty because it was over-generous in lending to people who otherwise might have been caught up in property speculation or something of the kind. Instead they went to their credit unions to raise moneys, not overtly for property and, as a result, the union ran into difficulty. The entire class of credit union, as I understand it, would be affected by the intervention of the regulator. These issues were not discussed with the people who know most about them. There is a real danger that the very ethos of the credit union movement will be undermined.

Deputy Burton's amendment No. 10 has, at least, the great merit of providing expertise from the people who know most to advise the bank about how it should proceed. It is a reasoned amendment that sets out in considerable detail what might be done. Regarding amendment No. 55, it was said to me that the Credit Union Act I introduced in 1997 makes provision for mergers and so on. Again, that can be an immensely sensitive issue. One might consider small - in the geographic sense - credit unions where in modern conditions some mergers or synergies may be apparent. Deputy Burton's amendment proposes an improvement in terms of how it would facilitate the voluntary merger of credit unions.

We are constrained for time and that is a shame, given the significance of this Bill and given the disaster that has befallen the country. This is worse than the Famine in some ways, yet the Government is rushing the Bill through the House and is giving entirely inadequate time to deal with it. I ask the Minister to take on board the amendments being proffered here, because the credit union movement is something precious and we need to calibrate carefully any changes to the regulatory environment.

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