Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael) | Oireachtas source

Imelda May has jazzed up the credit union image. The recent advertisements highlight the fact that credit unions know their customers, that they care about their needs and that they are at the centre of their communities. This is true of the credit unions in the constituency of Dún Laoghaire. The credit union movement tag line, "We look at things differently", is its main selling point. Credit unions look at their market differently; they look at profit-making differently an d they look at their customers differently. Unfortunately, they, too, were affected by the economic crisis. They have experienced investment losses and an increase in bad debt losses. The Irish League of Credit Unions which represents the majority but not all credit unions had a deficit of €45.691 million in 2010, compared to a surplus of €15.394 million in 2009. The economic crisis is making it difficult for credit unions to retain their unique co-operative character. Credit unions are a vital part of the financial system. They are a distinct alternative to other providers of credit such as banks, particularly in the current financial climate. There are over 3 million credit union members in 404 credit unions. This fact, coupled with total assets of the Irish League of Credit Unions of €13.9 billion in 2010, makes regulatory reform a very important undertaking.

The Credit Union Bill acknowledges this reality. It sets out a framework for the prudential requirements to apply to credit unions. It sets out requirements for reserves, liquidity, lending and risk management. It also provides scope for Central Bank regulation of standard procedures and other more detailed matters. This must be a welcome advancement. In total, it gives effect to over 60 of therecommendations made in the final report of the Commission on Credit Unions. The commission comprised experts in the field, including the Irish League of Credit Unions, the Credit Union Development Association and the Credit Union Managers Association. They had an opportunity to voice their concerns and make recommendations. They were listened to and their expertise was drawn on, respected and utilised.

The Department of Finance also engaged in public consultation on the general scheme of the Bill. This allowed stakeholders an opportunityto make submissions to help to inform and develop the legislation In addition, the Joint committee on Finance, Public Expenditure and Reform met stakeholders to discuss the Bill, as published.

Care and consideration have been given to this important legislation because credit unions are at the centre of their communities. Credit unions are a vital financial institution for many. Credit union staff and boards do their best to better the lives of the people in their communities.

Part 2 of the Bill deals with governance issues. In my experience, all the credit unions in Dún Laoghaire-Rathdown are very professional in their conduct. However, it will be beneficial for credit unions to have proper governance rules laid down. Section 53 states directors of credit unions must be suitably qualified to undertake their role. This is a common-sense regulation.

I ask the Minister to comment or write to me on an aspect raised by a credit union in my constituency - the guidance note on investments by credit unions published in 2006. Credit unions are allowed a 24 month period in which to bring their investment portfolio exposures into compliance with the single institution exposure limit contained in the guidance note. I ask the Minister to come back to me on this aspect. The credit unions are extremely concerned that it will limit them to one or two institutions in Ireland and that they will be forced to look abroad.

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