Michael McNamara (Clare, Labour) | Oireachtas source

I am glad to have an opportunity to contribute on this very important matter which affects rural and urban communities throughout the country. Earlier today I read parts of the judgment in the N. & anor. v. Health Service Executive & ors. case in light of the upcoming referendum. I was struck by the reference to the Book of Kings and the exercise of wisdom required by decision makers in certain circumstances. Wisdom of this nature is required of the Minister for Finance as we come towards the conclusion of Second Stage and move to Committee Stage.

The credit union movement is of tremendous value to all sectors of society but there are problems because, like almost every other sector of society, credit unions got carried away during the boom. Clearly, there is a requirement to regulate credit unions to ensure at a fundamental level that members whose moneys are saved with credit unions are able to receive interest, their moneys are safe, and those who volunteer and participate in credit unions can do so safe in the knowledge that what they are participating in is properly regulated and above board.

There is an expression that one can see what everybody is wearing when the tide goes out. The tide went out in 2009 and many financial institutions appeared increasingly naked. It became evident the investments made by many financial institutions were insufficient and that in many instances there was not enough money to meet the needs of these institutions. To a large extent this is why the State is in the position it is. Unfortunately, credit unions were not immune from this. The Irish League of Credit Unions report of 2009 made clear that problems existed in some credit unions. Nevertheless I would not like to see all credit unions banded with those which were overly flathúlach with the money of others during the good times.

In these more difficult times the need for credit unions is greater than ever. In 2002, during the boom, 240 new people experienced financial difficulty and 200 existing clients received assistance from Clare money advice and budgeting service. These numbers jumped dramatically to 640 new and 600 current dependants last year. Along with the Minister for Social Protection, Deputy Joan Burton, two weeks ago I had the honour to attend in Ennis the launch of a new information leaflet on saying no to doorstep credit. It is part of a joint initiative between MABS, the Citizens Information Board, the Society of St. Vincent de Paul and the credit union to assist people in financial difficulties. The leaflet points out that borrowing €500 from doorstep credit can cost approximately €650 six months later. It is exactly to prevent this type of practice that credit unions were set up, and to enable people who, before the advent of credit unions and before they became widespread, were reliant upon loan sharks and moneylenders to finance their day-to-day activities. While acknowledging the need to regulate credit unions, we should not lose sight of the very important social function which they carry out in society. Ironically, as we realise in these difficult times the necessity to regulate credit unions, the function they carry out is becoming more important than it ever was when they were not regulated.

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