Séamus Healy (Tipperary South, Workers and Unemployed Action Group) | Oireachtas source

I welcome the opportunity to speak to the Bill, which is very important legislation. I am sure most Members in the House would have practical knowledge of this area and many are likely to be members of their local credit union like I am. Many families have been long-standing supporters and members of credit unions and in my own case, my late father was a founding member of Clonmel Credit Union; I am sure that history is mirrored across the House.

Members of credit unions can be justifiably proud of the very successful, democratic and community-based organisation that has been put in place over the years. It is a major national organisation led by volunteers providing social finance for members and communities right across the country. In today's world, where we have recession and serious financial crisis, the movement has played and continues to play a very important role in supporting members and communities. It has been very innovative over the years in providing that service. For example, the current Money Advice and Budgeting Service, MABS, is effectively derived from the credit union movement and an innovation started by the Lough Credit Union in Cork some years ago. The credit union movement deals on a daily if not hourly basis with the MABS organisation and others such as the Society of St. Vincent de Paul in dealing with member and community difficulties across the country.

I broadly welcome the Bill, as does the credit union movement and the Irish League of Credit Unions. There must be regulation, which everybody accepts, but those in the movement believe a number of amendments are necessary. There is a very serious concern among credit unions and members that they are being treated, effectively, as commercial banks and being lumbered with years of commercial banking legislation that is not really relevant. It is important to say that credit unions are well operated, managed and capitalised, they are not banks, which is an important distinction. Banks have created the financial crisis we are in and bank workers continue to receive large salaries and pensions. Credit unions have supported members and local communities through the recession on a voluntary and not-for-profit basis. The saying goes that they are "Not for profit, not for charity but for service".

It is important to recall the history and ethos of the credit union movement and where it came from. It is very important to recognise that they are not banks, and the movement was started in 1958, with the first branch in Dún Laoghaire founded by public-spirited people like Nora Herlihy from Ballydesmond, a teacher based in Dublin. Mr. Séan Forde was a baker in Dublin and Séamus McEoin, from Kilkenny, was a civil servant based in Dublin. In the late 1950s these people recognised the difficulties which are mirrored to a large extent in our current position, where we can see unemployment, poverty, poor housing, emigration, etc. Those people started a movement that has blossomed and been very successful over the years.

The movement now has 2.9 million members, with a high percentage of credit union members economically active throughout the country. Savings amount to approximately €11.9 billion and there are 9,200 active volunteers, with 3,500 staff in approximately 500 credit unions nationally. It is a very important, successful and highly motivated volunteer-led organisation. It is supporting members, ordinary people and local communities right around the country. To some extent the movement is based on the old Irish meitheal, or co-operative self-help among a group of people gathered through a common bond. That common bond is there for support, ensuring there is social finance through the likes of small education, home improvement or special event loans. They help people through severe economic difficulties.

There are 500 member unions, and we should compare that to the number of banks. Credit unions are expanding and cover significant areas around the country, not just in cities but in big towns, villages and local rural areas. We can contrast that with the banks, where we have seen a contraction of the services provided; only recently, 44 branches of AIB were closed, along with various other services. The credit union movement is filling the void that has arisen, particularly in smaller villages and towns throughout the country.

The credit union movement is the leading provider of social finance in Ireland, with €750 million provided. Banks are businesses that look to make money but credit unions exist to support members and communities, ensuring members can see their way through financial difficulties.

The credit union movement has a number of concerns with this legislation. For example, the movement's ethos is not effectively recognised and it is being lumbered with commercial banking legislation that is irrelevant to credit unions. It is important to put on record the amendments that the movement wishes to see to the legislation. I support these amendments and hope that the passage of the Bill through the House will see their acceptance.

The credit unions are concerned about the proposal to apply to them Central Bank legislation dating from 1942 to 2011. In their opinion, this is unfair and should not form part of the Bill. They are also concerned about the Central Bank (Supervision and Enforcement) Bill 2011 being applied to them. At a minimum, any regulatory direction must be appealable to the Irish Financial Services Appeals Tribunal.

The Bill should support the sharing of services among credit unions so that members can avail of a wider range of services throughout the country. This would be a practical amendment. The movement also believes that credit unions should lead the way in assisting the Government with its financial inclusion agenda and that the new Bill should enable them to offer electronic payment accounts.

In the opinion of the movement, the Bill should enable credit unions to provide funding to Government-guaranteed schemes and projects with a social benefit. The movement's emphasis has been and continues to be on the provision of social finance.

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