Martin Heydon (Kildare South, Fine Gael) | Oireachtas source

I welcome the opportunity to speak to this much awaited Bill. I spoke last year in the House on the credit union movement, its unique place in society and the important role of voluntarism. I firmly believe that now more than ever, when so many individuals have lost faith and trust in many of the banking institutions, that the credit union movement needs to be supported and strengthened in order that it can act as a trusted alternative. This is one of the fundamental purposes of the Bill.

I note from a recent article by Mr. Kieron Brennan of the Irish League of Credit Unions that credit unions continue to welcome new members every day. More than 40,000 new members joined credit unions last year. This is a strong testament to the ethos and core values of the credit unions that we need to retain.

Obviously we all recognise that, with the €500 million the State has set aside, we must change and develop as new regulations come into force. However, while trying to set out the terms of restructuring and increased oversight of the movement, we should not lose sight of the many positives associated with the 403 credit unions in communities throughout Ireland.

I acknowledge the long process engaged in and the excellent work carried out by the Commission on Credit Unions on the recommendations of which much of the Bill is based. The process of direct engagement, consultation and surveys of stakeholders on the sensitive issues involved is an example that could be used in many other scenarios and lays a strong foundation for many of the provisions included in the Bill.

I have met representatives of the credit unions in Kildare South and taken on board many of their concerns about the changes proposed, some of which I would like to address. The tiered system of regulation is a welcome initiative, but we need to ensure the tiers are set at appropriate levels. I am aware of two very diffident credit unions in Kildare, one with 4,500 members and assets worth not much more than €10 million and another with over 20,000 members and assets worth just under €100 million. Obviously, the issues facing these two credit unions are different and any tiered regulation system would need to reflect these differences. Tiers need to be about more than asset size alone.

Like many other financial institutions, the credit unions are dealing with many more arrears cases than before and need to be given the flexibility to be able to assist their members as much as possible. We are constantly encouraging the mainstream banks to engage with those in arrears and come up with flexible solutions. Credit unions are no different. If we do not provide for this flexibility within the tried and trusted credit union model, we will inevitably drive more of those in financial difficulties into the hands of illegal and completely unregulated moneylenders.

The investment model for the credit unions needs to be addressed to allow some funds to move from short-term liquid investments. I welcome recent comments by the Minister indicating that he is open to proposals from the credit union movement on the issue of investment in schemes with a social function. I look forward to seeing these being developed.

Let me mention Newbridge Credit Union, with which the Minister is familiar. While the special manager continues to carry out his role, the members have great concerns and their frustration is increasing on foot of the lack of communication or information from the manager on the ongoing financial review process. Members who will foot the considerable cost of having the manager appointed are very anxious for an AGM to be held in order that they can receive some information and have their concerns heard - never mind the fact that they have not being paid a dividend for two years.

I welcome the commitment shown by the Government to the credit union movement with the setting aside of €500 million to address problems within the sector at a time when there are many calls on public funds. In the 1950s the founders of the credit union movement recognised the considerable difficulties and lack of confidence caused by mismanagement and the lack of money. They resolved to identify a system that would allow people to gain more control over their finances. Now, almost 60 years later, the same principles apply. There is a great need for credit unions. We need to ensure the legislation and regulatory framework created to secure their viability are particularly suited to them and allow them to continue to function as intended. I look forward to working with them and their members to ensure that this is so.

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