Tony Killeen (Clare, Fianna Fail)

A Leas-Cheann Comhairle, I want to thank you for allowing the inclusion of all seven amendments that relate to the credit unions and I acknowledge the agreement of my colleagues on that. I am glad that everybody who wanted to make a contribution on this particular matter has had the opportunity to do so.

It is important to respond to one of the questions raised by Deputy O'Donnell about the meetings between the Minister for Finance with the credit union representative bodies. I understand that he engaged in detailed discussions with them on section 35 at two separate meetings in May and June. The Minister also met members of the Oireachtas Joint Committee on Economic and Regulatory Affairs. Having reflected on the views expressed, the Minister is introducing eight measures that will significantly amend the section 35 proposals.

The measures include the obligation on the Central Bank to establish an advisory group on credit unions, which is the subject of amendment No.34, and there are seven other measures. The proposed sections 35A and 35Bin the Bill are deleted. The easing of section 35 lending limits is now directly linked with the necessary balancing provisions in a cohesive framework within section 35. A specific statement is introduced in section 35(2)(c), meaning that the Central Bank may give notice to credit unions about lending requirements only where it considers it necessary for the adequate protection of members' savings. A further new provision means that in applying requirements in respect of lending by credit unions, the Central Bank must have regard to the lending framework provided for in section 35.

Wider powers, originally intended for the Central Bank, in respect of loans and classes of loans under section 35A(1) have been dropped. Wider powers to enable the Central Bank to impose requirements other than by making rules under section 35A(3) have also been dropped. The systems controls and reporting requirements, originally provided for in section 35A(1)(f) are now specifically tied into the lending requirements in the section.

Taken together, the measures represent a significant package of changes that will establish a lending framework through which the registrar of credit unions can give notice of requirements arising under the relaxation of lending limits provided for in section 35 in a prudent, balanced and proportionate manner, but no more than that. Reasonable conditions and generous transitional arrangements will also apply.

Amendments Nos. 53 and 54 go a considerable way towards meeting the reasonable concerns of credit unions. At the same time, there is an irreducible minimum level of protection which depositors, credit union members and the general public are entitled to expect. Overall, the measures being brought here provide for this level of protection.

In regard to amendment No. 55, as the Minister for Finance pointed out, Part 9 of the Credit Union Act 1997 deals with the amalgamations and transfers of engagements. Deputy Rabbitte made a fair point about the manner in which that ought to be considered. It is adequately dealt with in the legislation of that time, even if he is inclined to feel that it might be usefully amended at this stage. Section 128 also provides that any two or more credit unions may amalgamate by forming a credit union as their successor. Each is required to agree with the rules of the new credit union and approval is necessary from the Central Bank.

There is agreement on all sides of the House that the credit union movement plays a very important-----

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