Clare Daly (Dublin North, Socialist Party) | Oireachtas source

The first point that has to be made is that credit unions are not banks. As other Deputies have said, this is something we should celebrate against the background of bankruptcy in which many of our banks' rogue practices have put the country and many of its citizens. It is a good thing we have a viable financial alternative to our banking system in the form of credit unions. The credit union movement was built from the grassroots upwards and provides access to finance and credit to many citizens who would otherwise be excluded from such services. These organisations made the difference, enabling people to avoid poverty and live with dignity.

While the banks that lent recklessly have cost this State and the taxpayer so much money, our credit unions, operated by more than 10,000 volunteers along with 5,000 staff, have succeeded in building up a financial giant. Less than 50% of their reserves are out on loan. In addition, they have a facility of billions of euro which they have offered in solidarity and are offering to this State for job creation programmes and so on. That must be our starting point.

Credit unions have a different history and ethos based on involvement and participation and are designed to serve their members rather than existing just for profit. Given some of the provisions in this Bill, one would wonder whether it is an ideological assault on them as a viable alternative to banking. To be quite honest, some of the measures do not make any sense if we want to preserve credit unions as they are.

Nobody is opposed to regulation. Many of the measures in the Bill are fine and there is no doubt it is the product of a huge body of work that went on behind the scenes with the commission and other parties involved in the process. That is to be welcomed. While accepting that, however, the Bill needs to be changed. I recognise the role of the Irish League of Credit Unions which has done a tremendous job in its input into the legislation, in addition to the job the league does daily. Credit unions interact with their members and provide much of the research data on poverty rates, income figures and citizens' economic status. Credit unions have a good role to play. In their submissions to all of us, they have articulated the reasons some aspects of the Bill need to be changed.

Former Senators had some neck to come in a slag them off in a disingenuous way. They implied that the credit unions falsely engaged with the commission, when it is quite obvious that they agree with much of the input. However, according to the feedback from credit union members, some proposals have clearly been rejected. That is healthy and shows how democratic these organisations are. That point is backed up by the level of correspondence that we, as legislators, have had from ordinary credit union members who voiced their concerns in this regard. That is progressive and something one would never see with a bank.

The credit unions have also said that some measures that were discussed have been omitted, while some new provisions are included which were never discussed.

Consequently, having participated in a process, they have a legitimate right to be disappointed with some of the outcomes, while also recognising the good contained in a lot of them.

Members' starting point in this regard must be the different historic and current roles being played by credit unions. Trying to transfer banking regulation, in an effort to in some way batter credit unions into being similar to banks, will not work. Therefore, some of the measures are regrettable. Other Members have made the point about the considerable concern regarding the Central Bank legislation being foisted on credit unions, including all the statutory instruments. I am aware the Department has indicated there is nothing to worry about, as only approximately six such instruments actually apply to credit unions. If only six instruments apply to credit unions, the Department should specify them. Why should they all collectively be mushroomed into a big mass of decades of Central Bank legislation that potentially could be used later on to undermine some of the good work these organisations do or to hamstring them in some way?

The credit unions effectively made the point about how they need to share services and how perhaps this has been put forward in the Bill in a somewhat unbalanced fashion. The sharing of services is provided for in respect of activities such as employing an accountant, bidding for collective services or whatever. However, the credit unions are concerned about the lack of input at membership level. In other words, for example, I cannot go on holidays to County Donegal and use the credit union there. It is not good enough to state there is nothing in the legislation that prevents this and that it will be okay. If Members think this is a good thing, as do I, they should provide for it in the most comprehensive body of legislation yet to be envisaged in respect of credit unions. Why would Members not do this? One might almost suspect the only reason it is not provided for is the banking institutions are afraid that credit unions will become even more of an alternative to banks, as well as being a new way of looking at and dealing with things, and that credit unions pose a threat in that sense. If this is not the reason, Members should specify this in this legislation anyway.

There is a similar argument to be made in respect of the credit unions' highlighting and offer of billions of euro in moneys on which they sit that are not lent out and which, to help the Government in a gesture of solidarity, could be invested in the State in a public works programme to put people back to work and stimulate the economy. Members on this side of the House have a bit of a pain in the neck from listening to Members opposite going on about where we will get the money. Here is a citizens' organisation pointing out it has billions of euro and stating it is prepared to do business to invest in this country with its members' resources in an effective way that will benefit the entire economy. It simply is not good enough to say this could be done in any event. This should be provided for in this legislation and it would make an enormous contribution to the turnaround in economic policy. It would provide a stimulus and a beginning of a change in direction that is badly needed as an alternative to the austerity which clearly is not working and is bleeding the domestic economy dry. Members must consider this offer and should provide for it in this legislation, and it is welcome that the credit unions did provide for it. Consequently, if these issues and the points that have been highlighted on the need for democratic participation, boards of directors and so on are dealt with on Committee Stage, I believe the legislation can be progressed.

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