Dara Calleary (Mayo, Fianna Fail) | Oireachtas source

I welcome the publication of the Bill and the work done by the Commission on Credit Unions earlier this year, which led to the Bill. It is important that we recognise and acknowledge the importance of the credit union movement in Ireland. We have more credit union members per head of population than any country in the world. On a relatively small island, 2.9 million people have accounts in 403 credit unions. At a time when banks are alienating local communities by closing branches and restricting services, the credit union movement in uniquely placed, with a footprint as deep and wide as it has, to fulfil some basic savings needs. While most of our discussion has focused on lending, the credit union traditionally was also a place for savings. It was a trusted broker and we felt we were saving our money locally. The organisation has done outstanding work.

I acknowledge and support what Deputy Browne said about those who serve on boards of directors and give significant time in assessing loans and running an institution. At a time when we criticise directors of financial institutions, it is important that local people are willing to step up and do this in the full glare of their communities. Some of the proposed rules and restrictions on directorships may have the opposite effect from what is intended. In any organisation, whether the GAA or a credit union, it is difficult to get people to volunteer. If we place restrictions, for the sake of doing so, on people serving as directors we may restrict credit unions from growing and we may throw the baby out with the bath water.

I agree with Central Bank supervision. Clearly, this is needed. The fact that 51 credit unions have reserves of less than the required 10% and another 25 are classified as seriously under-capitalised illustrates the need for supervision. This, however, is not the supervision needed for the pillar banks or the big lending institutions. It must be fit for the type of organisation a credit union is, and getting rid of experienced directors while introducing this new element of supervision is not the way to go. I ask the Minister to look at this issue on Committee Stage and also to address it in his concluding remarks.

The credit union movement has issues regarding its ability to facilitate shared services and electronic payments. The Department is investing considerable State resources in assisting the league in this regard. That is to be welcomed. The more services credit unions can provide, within their remit, the better. In the last number of years, however, some credit unions have gone beyond their remit and ended up in situations such as we saw in Newbridge and in other unions that did not maintain the 10% reserve. The Central Bank acted properly and very quickly. I commend the Minister on the way the Newbridge situation was dealt with so efficiently. Had it been allowed to develop, it would have affected the entire movement and therein lies the problem. A few bad eggs cannot be allowed to ruin the entire movement. Many directors kept their heads, maintained respect for their institution and did not go down the same road as those few. In framing this legislation, which will be on the Statute Book for many years, we must respect the institution and allow for some element of flexibility.

Deputies received a note from the Whips office this morning reminding us that the legislation must be finalised quickly in order to allow the €250 million to proceed. While we need to see the money going into credit unions, I hope the Minister will give time, as we debate the Bill, to consider some of the concerns regarding directorships.

The Personal Insolvency Bill will be a threat to the credit union movement. While that Bill is welcome and needed, credit unions will be in the vanguard of many of the small settlements covered by the Personal Insolvency Bill. As well as lobbying on the Credit Union Bill, the Irish League of Credit Unions needs to focus its energies on readying its unions and briefing them on what is coming with the Personal Insolvency Bill. It would be interesting for the league to provide members of the Oireachtas with a briefing on the projected impact of settlements under personal insolvency legislation, so that we can understand its impact on the credit union sector when it is enacted and begins to take hold. When anyone with a personal loan of less than €20,000 from a credit union avails of the new arrangements, it is the credit union that will take the biggest hit.

As banks withdraw from more and more areas, the credit union will be the only financial institution left in many communities. Deputy Browne mentioned the growing role of credit unions in supporting social projects. We need to work with credit unions and give them some space to do that. Many businesses cannot get funding for small projects that would generate employment. That is what each of the 166 Members of this Chamber should be about. We should give credit unions some element of business lending capability. We do not want to see credit unions having huge business divisions, but a small retailer or a SME owner who wants to buy a piece of machinery and previously might have been able to get a grant from an enterprise board of Leader company should now have the capacity to deal with a credit union. Again, this keeps the business local and there are restrictions on what can be done. The Bill gives us a chance to promote credit unions in doing this.

The role of treasurer is to be abolished and responsibility for accounts and their preparation moved to the manager. This is to be welcomed. Someone will be fully legally responsible for the preparation of accounts. However, the Bill piles new responsibilities on volunteer directors. I would like to think some of the money being pumped into credit unions will be ring-fenced for briefing directors and staff of credit unions on their new responsibilities. This is happening very quickly. The legislation will be enforced in the next few weeks and people's attention will be diverted to the budget.

I hope a couple of hundred thousand euro from that €250 million will be spent on ensuring directors cannot say they were not fully aware of their new responsibilities. Work must be done with the Irish League of Credit Unions and the credit union development group around that funding.

Overall, much of this Bill is welcome but a little fine-tuning could be done to make it more flexible so that it will make a real difference. Let us not get rid of the good experienced people who have done their jobs properly to tick boxes and turn over boards. We must allow some element of flexibility because if we do not, at a time when it is impossible to get people to volunteer, we might get rid of experienced people who have a lot to bring to the table.

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