Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I thank the Minister for bringing forward the Credit Union Bill 2012. I commend the members of the credit union review commission on all their hard work and commitment and I acknowledge the huge effort and time they invested in producing their interim and final reports. It is on these reports the legislation is based. I also wish to recognise and pay tribute to the huge work done by and commitment of credit union volunteers who continue to play a crucial role in the credit union movement. Without those volunteers, credit unions would not exist. Their voluntary contribution to the movement throughout the country can never be overestimated.

Credit unions are not immune to the current economic difficulties. The volunteers and staff continue to work their way through what is a very difficult period. I commend them on their massive commitment and effort in the context of serving their communities. I worked as a credit union manager for 12 years and I previously worked with Ulster Bank. Having experienced these two very different types of financial institutions, I wish to state in very clear terms that I remain a strong advocate for credit unions and the ethical banking values they uphold. Those values ensure the member or customer comes before profit or gain. I have seen at first hand the benefits a credit union can bring to a community. I am committed to the credit union movement and I am of the view that this legislation will support and allow credit unions not only to continue to provide the services they currently offer to their members but also to strengthen and enhance such services.

The membership of credit unions is vital to their survival in an ever-changing world. A previous speaker noted that virtually everyone in the country has used his or her credit union at some point. This can be often the problem. People use their credit unions when they cannot obtain credit elsewhere. When their financial position has improved and their credit rating re-established and as their needs become more complex and demanding, they move their business to a bank. To survive, credit unions need to retain their members and increase their market share. The Bill will allow them to use synergies within the sector - through co-operation and amalgamation - to provide a broader range of services that will assist them in retaining their members and serving their needs.

The credit unions are at a crucial juncture in their development. While it could be stated that they are victims of their success, they are also the victims of their reluctance to move to another stage in their development. They have been unable to progress and there have been fragmented attempts at offering a wider range of services which have resulted in some credit unions facing serious financial difficulties. In recent years there has been no clear vision for credit unions. I am of the view that the Bill will give them the impetus and encouragement they require and will, with the assistance of ReBo, assist them in progressing to another level. The Bill also takes cognisance of their special place within our society, their mutual nature and their strong voluntary ethos. The latter has allowed them to expand and grow during the past 50 years and has facilitated them in providing a vital service to the less well off.

I ask the Minister to reconsider the position regarding the time limit of nine years relating to voluntary directors and the three-year term relating to voluntary officers. If implemented, these restrictions will mean some credit unions will have difficulty in attracting volunteers. They could also lead to valuable expertise and skills being lost. Credit unions are being asked to upskill their directors and develop their knowledge base. It is important, therefore, that the experience which has been gained should not be lost as a result of people being forced to retire. We do not want some volunteers to feel like conscripts. It is important, therefore, that every effort be made to attract new volunteers.

I wish to address a number of issues in respect of the Central Bank. There is nothing in the legislation which supports the Central Bank putting in place a set of rules and standards for credit unions. The Bill refers to the Central Bank deciding what is a viable credit union. However, the criteria that will be used to assess what constitutes such a credit union are not included in the Bill. A set of prudential rules have not yet been issued. I urge the Minister to ensure that as much clarity as possible is provided by the Central Bank in this regard. Credit unions are being asked to take on board these new standards and I am of the view that it is only proper that the Central Bank should clearly outline what is expected of them. In the recent past, the bank has issued directives and instructions without first carrying out any impact analyses. Neither did it provide justification for its diktats. In consultation with the credit unions, the Central Bank should establish a clear plan in respect of how its directives and decisions will impact on their business.

Having listened to credit union representatives and as a result of my experience of credit union regulation, it is my opinion that the Central Bank does not communicate well. It appears guidelines can be introduced or altered without prior consultation with the credit unions. The Central Bank regularly changes the goalposts. On some occasions, the attitude of its staff towards credit unions has left much to be desired. Volunteers have been made to feel incompetent, incapable and very vulnerable. There is a need to introduce a code of conduct for staff of the Central Bank in the context of how they deal with credit unions. At times, the bank has been erecting artificial and unnecessary barriers.

If the credit unions embrace the legislation and if the Central Bank improves its delivery of service, we can look forward to a sustainable credit union movement that will continue to be led on a voluntary basis and to meet the needs of those it serves. I want credit unions to be supported in order that they can continue to serve communities in cities, towns and villages throughout the country. I also want to ensure no community will be left without a credit union to serve the needs of its people.

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