Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

Ní shílim go nglacfaidh mé an tríocha nóiméad ar fad ach fáiltím go bhfuil an Bille seo os ár gcomhair sa Dáil inniu. Mar a dúirt an Teachta McGrath, tá glactha leis an ghá faoi choinne rialacha níos déine san earnáil seo ach tá imní ar dhaoine, go háirithe orthu siúd atá ag obair sa chomhar creidmheasa, daoine atá baint acu leis an chomhar creidmheasa agus ar dhaoine a bhunaigh an comhar creidmheasa faoi na rialacha seo. Is féidir linn an reachtaíocht atá os ár gcomhair a dhéanamh níos láidre agus níos daingne agus níos fearr do ghluaisteacht an chomhair chreidmheasa agus don tír.

A number of institutions embody the very best of what our country has to offer and they are based on values that should make every single Member of this House proud to be Irish. At a time when there is much justified public anger at institutions that have abused the people's trust, it is important to remind ourselves of the successes that endured even through the most reckless days of the boom. The Irish credit union movement is a movement of which we can be proud. It is not simply a financial institution, a lender or service provider; it is an integral part of every community in the country. It is important to remember where the credit union movement sits in society today. It is based on the values of community, volunteerism and solidarity. It was built and continues to be driven by people who are motivated by a desire to help their neighbours, communities and country. It is a grass-roots movement that is community led. It was founded by people such as Nora Herlihy, Sean Forde and Séamus MacEoin, who wanted to do something about the high unemployment, sickness, malnutrition, money-lending, hunger, poor clothing, poor housing and emigration that were so rampant in 1950s Ireland. It was a response by civic-minded people, true republicans, who were angry at the failure of the State to meet the needs of those sections of society that most needed support. The people who gave life to the credit union movement recognised that the root of many of these problems lay in the scarce availability and poor management of money. In response, they were determined to create an institution that would give people, particularly those with the least power and fewest resources, more control over their finances.

What started off as a very small initiative by people who had the national interest at heart turned into a national movement with more than 3 million members and branches in every county and parish. It is a phenomenal movement and we must recognise how important it is not only in the State, but throughout the island as a whole. The movement is motivated by an innate sense of justice and fair play that used to feature so strongly in Irish public life. This innate sense of justice is one that has been so battered and abused, particularly by senior politicians, bankers and developers in recent decades, as discussed last night.

This morning, as the Minister well knows, our newspapers and radio programmes are filled with stories of former bankers, civil servants and Ministers, many of whom were directly responsible for the social and economic crisis that has engulfed the country since 2008 and who are living lavish lifestyles on pensions of up to €500,000 per year. Meanwhile, as we know, ordinary people are struggling to make ends meet, pay bills, repay mortgages and, in a growing number of cases, put food on the table. They are frightened that December's budget will make their lives even harder, increase their tax burden, reduce their household income and withdraw their vital services. People are falling into even greater debt while the Government is standing idly by and breaking so many of its election promises and commitments in the programme for Government. As in the 1950s, it is institutions such as the credit union movement that are ready, willing and able to pick up the pieces to fill the gap left by a Government refusing to do what is right by ordinary people.

Of course credit unions are not perfect; we understand that. Individuals can and did make mistakes and it would be naive to suggest the movement was unaffected by the boom. The credit union movement would be the first to admit that the regulatory context in which it operates is in need of real reform, as I said in my opening remarks. It is actually the credit union movement that has been the leading advocate of that reform.

This is the context in which we debate today's Bill. The Bill is the latest in a considerable process of engagement between credit unions, their members, other interested parties and the Department of Finance. The commission on credit unions convened by the last Government made its detailed recommendations in March of this year, after a very long and detailed discussion involving all the sectors. The Oireachtas finance committee and the Department of Finance have continued to engage with all stakeholders since then to ensure that the subsequent legislation would be sufficiently robust and meet aspirations set out in the commission's report. Sinn Féin broadly supports the Bill. We commend the work of both the commission and Department in translating those recommendations into the legislation. I commend the Minister on his efforts and sincerity in this regard.

Our core position is very clear: we support strong, effective and appropriate regulation for the credit union sector. We want credit unions, their members and the communities in which they are rooted to have the highest levels of protection, probity and governance. It is important that we have the best legislation to achieve that. We believe that this can be achieved in a manner that is consistent with the distinctive ethos of the sector. I refer to its community-based, volunteer-based and not-for-profit ethos.

We need to remember time and again that credit unions are not banks. They are different and, therefore, regulation deemed appropriate for one type of financial institution may not be appropriate for another. However, let us nail the myth being peddled by some in this debate that calls for regulation that fits the distinctive ethos of the credit union movement and somehow calls for lighter regulation. These calls posit a view that could not be further from the truth. Sinn Féin wants strong regulation of the movement, high standards of probity and better governance. So, too, does the credit union movement and we commend it on taking the lead in promoting this.

There is no doubt but that the vast majority of the provisions in the Bill meet the aforesaid objectives. The substantive detail of the legislation, dealing with probity, restructuring and stabilisation, has my party's support.

These provisions represent sensible compromises as between the different views expressed around the table at the Commission on Credit Unions. The relevant sections represent the substance of the legislation and, in Sinn Féin’s view, the officials in the Department of Finance have got them right. We have significant concerns, however, regarding other aspects of the Bill which are not consistent with the spirit or even the letter of the commission's report and which will, therefore, require amendment. I hope the Minister will deal with these matters in an open and fair way. In addition, there are issues of crucial importance to the future development of credit unions which will be determined by the regulations arising from the Bill. These matters must also be examined during the course of this debate.

Our first key concern relates to the proposal to apply historic Central Bank legislation from 1942 to 2011 to credit unions. This was not considered by the Commission on Credit Unions and could have far-reaching consequences for the sector. Part 2 of the Bill, which includes the definition of financial services contained in section 6, gives rise to real concerns. In our briefings with the Department of Finance, the officials stressed that only those portions of this considerable body of legislation and accompanying statutory instruments which already apply to credit unions will come into effect from this new definition. However, this is not made explicit in the Bill.

We are also concerned at the impact of the application of the Central Bank (Supervision and Enforcement) Bill 2011 to credit unions. There was no discussion of this at the commission and no recommendations in this regard were made. The implications for credit unions are far reaching and must be considered separately from the legislation we are discussing today. There is also the important issue of shared services, one of the central recommendations of the commission's report and an issue that is of vital importance to the future development of credit unions. It is also an important element of the full implementation of the Government's own financial inclusion strategy. Again, in our discussions with departmental officials on this matter, they insisted that there is no need for additional provision on this matter, as existing legislation does not preclude credit unions from sharing back-end services such as administration. That misses the point. The key shared services the sector is seeking are those at the level of the member, particularly those relating to electronic payment accounts. If credit unions are to continue to grow and service their members and communities, they must be able to offer a wider range of services, including the facility for members to undertake transactions and access services from branches other than their own. If the Government has an objection in this regard, it should be put on the record. Otherwise, the Bill should be amended to allow for the development of these types of member-level shared services.

Another omission from the Bill relates to the enormous current and future potential of credit unions to invest in socially valuable schemes and projects. This is an important issue, which the credit union representatives addressed at the finance committee. Given the level of unemployment and emigration and the continued lack of private sector investment in the local economy, credit union funds, appropriately backed by Government guarantees, could and should be invested in sensible schemes and projects to create employment, develop local infrastructure and services and assist in local social and economic development. An explicit reference in this regard in the Bill would be of enormous assistance in the unlocking of what could be a significant source of investment, particularly in communities experiencing high levels of social and economic disadvantage. The credit union sector is to be commended on this initiative, which is perfectly in keeping with the ethos under which the movement was founded. We must always bear in mind that credit unions are not simply financial institutions but have a broader social remit.

An issue that has especially exercised credit unions at local level in both rural and urban communities is the proposed governance changes, particularly in regard to term limits on directors of credit unions and the prohibitions on membership of boards. Sinn Féin strongly shares the view of the credit union sector that portions of these sections of the Bill are unnecessary, anti-democratic and could, in some cases, undermine the volunteerism on which individual credit unions are based. As I said, Sinn Féin broadly supports the Bill, but this is one of the areas that requires adjustment. These proposals show a lack of understanding of the volunteerism that exists within the credit union movement, the democratic nature of the sector and its particular ethos. Small urban and rural credit unions, which operate from a very small pool of potential volunteers, may not be able to meet the very strict exclusions set down in the Bill. I do not mean to cast aspersions on any departmental official in terms of the drafting of the Bill, but anybody who lives in a small community, such as my own home town of Gweedore, understands the difficulties in this regard. The responsibilities and roles set down in the Bill are very strict, and this move towards stronger regulation is welcome. However, the constraints under which small credit unions are operating mean that these provisions could undermine them in a significant way. The sector has presented very coherent arguments in support of the amendment of the relevant sections of the Bill, to which we hope the Government will respond positively. I appeal to the Minister to have an open mind to the amendments we intend to bring forward on Committee Stage, in the absence of amendments from the Minister himself. We must recognise the unique role and structure of the sector.

Credit unions are also concerned at the proposed removal of the office of treasurer as outlined in the Bill. We accept the argument underlying this section, namely, that the current role of treasurer requires reform. We are in agreement with the sector, however, that the position could be retained for the purpose of ensuring the presentation of timely accounts and other matters to members at annual general meetings.

Two other issues I wish to highlight do not require amendments but do require discussion so that when the Bill is enacted, these specific aspects of its implementation are done in the right way. There is clearly a need from a regulatory point of view to group credit unions into bands or tiers for the purposes of applying different levels of regulation. Everybody is agreed on that principle. However, Sinn Féin shares the view of the sector that the scheme as suggested by the Commission on Credit Unions could be improved upon. We were heartened in our discussions with departmental officials to see an apparent recognition of this.

I hope that when the Minister comes to deal with this issue, he will outline a scheme that is not based on size alone, but which also incorporates the level of risk and complexity involved concerning credit unions. If there is any lesson to be learned from the collapse of the banking sector and the trouble the bankers have got us into, it is not just about the size of the institution but also about the risk involved. It is about the type of investments or products that are being offered.

In addition, there is the thorny issue of the relationship between credit unions and the register of credit unions. The Minister will be well aware that I have raised this issue in the House before now. We have spoken many times in the Chamber about the negative impact of ongoing lending restrictions imposed by the register on individual credit unions, their members and communities generally. Our party has also articulated the strong feeling among many credit unions that the Central Bank and the Financial Regulator are not on the same page when it comes to the future development of credit unions. It is crucial that while we will deal with legislation strengthening areas within the credit union sector, we must also have a vision for the credit union movement in future. We must have an idea of where the credit union sector can go, how it can develop and what role it will play.

The request by the movement for a formal, written memorandum of understanding between the regulatory authorities and credit unions could, if got right, go some way to repairing what can be described as a strained relationship. We can all agree that it is a very strained relationship. The details of such a memorandum could be developed at a later stage by the Central Bank in consultation with the implementation group. Clearly, however, the legislation should not deal with the detail of this matter. A commitment from the Minister during the passage of this Bill that a memorandum of understanding should be developed would be a welcome development. That is the key point. I invite the Minster to signal such a commitment in his contribution. It would go some way to help repair that strained relationship to which I referred to.

These are the key points that Sinn Féin wanted to raise during this debate. This is a good Bill, but with amendments to a small number of sections it could be a very good Bill. I hope, and am sure, the Minister will engage with the Opposition on Committee Stage to strengthen the legislation in order that all parties in this House believe it is the best legislation. It is not only timely but also necessary.

Some weeks ago, I was genuinely disappointed when I read in the newspapers about former Members of the Oireachtas deliberately misrepresenting legitimate concerns of the credit union movement on specific aspects of this Bill. I shared time with some of them in the previous Seanad. That misrepresentation in the media was regrettable to say the least. The suggestion that those of us who want to improve this Bill are somehow opponents of reform or, worse still, opponents of strong regulation is simply false. It is untrue and does not help the debate and the democratic process in which we are involved.

Like the credit union movement, Sinn Féin wants strong, effective and appropriate regulation. It is necessary for credit unions, their members and communities at large. There is much in this Bill to commend to the House, but let us ensure the final Act is fit for purpose. We must make the necessary improvements on Committee Stage to ensure that when enacted, the Bill has the approval of every single Deputy.

The credit union movement and those who keep it alive make me proud to be Irish. They represent the very best of what it means to be Irish today. I share their values and vision. Given their commitment and contribution to society over the past 50 years, we owe it to them to pass the best possible legislation the Oireachtas can deliver to safeguard the future of the credit union movement and all those who benefit from it. I encourage the Minister to engage constructively with the issues that I and credit union members across the State have raised with him and his departmental officials in a public and personal capacity.

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