John Browne (Wexford, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak on the Bill. Over the past number of days, we have received many e-mails from the Irish League of Credit Unions questioning some aspects of the Bill. There is a wide debate outside of the House in the credit union movement, which is a good thing. We all recognise the importance of the credit union sector, which has provided a valuable social and economic service to the people of the country for many years. The credit union is very prominent in Ireland, with approximately 3,000,000 members. For some unknown reason, I had to vacate my position as director of a credit union in Enniscorthy when I became a politician. Seemingly, politicians are not entitled to be on boards of credit unions. I recognise the importance of credit unions and the valuable service they provide to people.

In recent years, they have taken on a different role. In the past, they were seen as the poor man's bank. Credit unions provided a valuable source for people who could not get a loan in the banking sector, such as people on low incomes, those who were unemployed and those in receipt of social welfare income, who found difficult to comply with loan requirements in banking institutions. It is not just now that people cannot get loans from banks. On many occasions, I contacted credit unions to seek support for people in financial difficulty, who needed moneys for different situations. I always found the credit union management to be supportive of, and helpful to, less well-off people.

In recent years, credit unions have broadened their bases substantially. GAA clubs and sporting organisations acquired loans for development. Sporting organisations in receipt of lottery funding received loans from the credit union based on ability to repay the loan. My GAA club is involved in that aspect of the credit union. The credit union was very helpful in the development, which was valued at €1.5 million and employed many people in the provision of new dressing rooms and a sports hall and in developing playing pitches. The credit union provides a service for small businesses and organisations seeking to create and hold onto jobs and expand business. At a time when banks were not very helpful, the credit unions stepped into the breach and offered their services.

We must also recognise the 10,000 volunteers who operate credit unions across our country. These people give up their time for meetings, including board meetings and credit committee meetings. Some 5,000 members of staff are employed by the credit union sector, providing a valuable source of employment.

Regulation is very important and is a buzzword nowadays but it is equally important that the credit union should not be over-regulated. It is important the Bill is fit for purpose for credit unions because people have very little faith in the banking system. We do not want to have over-regulation or to destroy the ethos and concept of credit unions and their manner of operation. It is also important to recognise the social aspect of the credit unions and their services so that credit unions are not tied to severe regulations being laid down for banks. In such a scenario, credit unions might find themselves unable to operate.

The Central Bank was mentioned in the Minister's speech and in the Bill. I am concerned about the heavy hand of the Central Bank. Perhaps it was not heavy enough in the past but now it will be very heavy, which will impinge on how credit unions operate in the future. The credit union movement is popular with ordinary people. Credit unions exist in every town and major centre of population. In my county, there are smaller communities where people give their all on a voluntary basis. Where they are no longer able to survive, smaller credit unions will be amalgamated into larger ones. That may be a good thing because then we can have more regulation and accountability on the amount of money collected, held in reserve and allocated. The only way credit unions can survive in the future is on the basis of loans and income from loans. In any amalgamation, it is important to take into account all elements.

The credit union movement is a voluntary movement. The credit union sector has concern about some regulations and aspects of the Bill concerning the restructuring of boards and the length of time people can remain as directors. Some credit union people believe there is too much interference in how this Bill has been framed. Those who have given a lifetime of service to credit union boards should be allowed to remain rather than turfed out because people want to do things differently according to the Bill. Perhaps the Minister can re-examine this when he is replying on Second Stage and when it comes to amending the Bill.

Public representatives have received literature, e-mails and statements from the Irish League of Credit Unions. This surprises me because the Commission on Credit Unions has reported and the Oireachtas committees have been in dialogue with the Irish League of Credit Unions and others involved in the credit union movement. I felt that agreement had been reached, but new issues have been raised in e-mails to Deputies.

I received an e-mail today from Mr. Kieran Brennan, chief executive of the Irish League of Credit Unions. He said:

We broadly welcome the Bill and the reform provisions it advances. There are some specific areas that we believe should be addressed in the Bill. First, items that were not agreed by the commission are now being proposed for implementation in the Bill, for example, the application of Central Banks Acts and the Central Bank (Supervision and Enforcement) Bill to credit unions. Second, matters agreed by the commission have not been included in the Bill, for example, facilitation of shared services, electronic payment accounts and basic payment accounts. Third, there are some proposals agreed by the commission which many individual credit union members have issues with, such as the imposition of term limits and prohibitions on membership of boards and board oversight committees.

The league, as a representative body, is duty bound to represent the views of its members, even if some of these views may be at variance with the commission's recommendations in a number of small aspects.

When the Minister is replying to the debate, he might respond to some of the issues raised by the Irish League of Credit Unions in its communiqués to Members.

We all want the Credit Union Bill to be relevant to the day-to-day needs of credit unions in the future and, most important, that ordinary people who want to avail of loans or invest in credit unions will be able to do so freely, easily and without the excessively bureaucratic systems that now seem to be operating within banking circles.

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