Arthur Spring (Kerry North-West Limerick, Labour) | Oireachtas source

Over the last day or so, I have listened to Deputies speaking about this legislation as if it will cause the demise of this country's credit unions, which have 3.1 million members. On the contrary, we are trying to provide for lending and deposit institutions that are stronger, more regulated and more prudent. Like 3.1 million people throughout the country, I am a member of a credit union.

We have been contacted by the Irish League of Credit Unions and the Credit Union Managers Association. The Irish League of Credit Unions has suggested amendments to the Credit Union Bill 2012. I understand that its submission has been sent to the Department and that the Minister has had time to peruse it. The Minister set out his thoughts on the Bill in a comprehensive reply to Question No. 57 of 24 October last.

I am highly aware of the capacity of credit unions in rural areas to attract appropriate people of the calibre set out in the Central Bank Acts, as mentioned by the previous speaker. Under the new legislation, they will have to undertake the onerous task of having to replace directors on a recurring basis and the onerous task of the new treasurer. This requirement could ultimately lead to the demise of credit unions in small peripheral areas.

We cannot underestimate the credit union movement. It has fulfilled a role in society that has not been fulfilled by banks, loan sharks and other people we will not mention in the House, who have sought to benefit from the circumstances of people who are not well off. It looks after people when it comes to First Holy Communion, people going to college for the first time and people seeking their first car loans. It is the place where we realise how vital it is to save money in order to be able to purchase a house and do necessary things in society.

I wish to comment on some of the suggestions that have been made by the Irish League of Credit Unions. I think we are going to head towards electronically enabled payments accounts. I welcome the proposal regarding social finance. It is something that should be examined with regard to pensions as well. It would be preferable for the money that is put on deposit to be ultimately spent in the local area rather than throughout the country as part of public private partnership agreements. A real benefit could accrue from local people putting money into an institution locally, having an investment stake in it and ultimately reaping a dividend from it.

It is obvious that the term limits will present a problem. A "hub and spoke" resolution to this problem will have to be considered. One cannot tell people in rural areas that they cannot have a credit union because it is not possible to find the appropriate directors. We have discussed the prohibitions at length. Many of the Deputies who spoke last night recognised that onerous tasks are being bestowed on credit unions.

The memorandum of understanding for a credit union is significantly different from that of a normal registered company. The Minister referred to the need to be regulated under the Central Bank Acts in response to Question No. 57 of 24 October last:

It is not the case that the Central Bank Acts are banking legislation. The principal domestic Act dealing with the establishment of banks is the Central Bank Act 1971. The references in that Act to credit unions are specifically required to ensure that credit unions are not subject to a banking regime.

It is imperative that this remains the case at all times. The two types of institution are not the same. I encourage people not to adopt a multifaceted banking approach. Credit unions need to continue to be vanilla banking institutions that take in deposits and provide smaller loans. They need to proceed on a socioeconomic path, rather than on a balance sheet path.

Overall, I do not believe this will diminish the role of the credit union but there are issues that are obviously necessary to consider. The Minister has looked at the issues and the Irish League of Credit Unions has some concerns, although CUMA does not have any real concerns at present. Nonetheless, I believe consultation rather than confrontation is the best way to proceed. I would like to see consideration of the proposed amendments being trashed through and I look forward to seeing this in the finance committee in the not-too-distant future.

It is also worth noting, as a Parliament, that the credit unions did not provide money for apartment blocks in Ballsbridge, for contracts for difference or for foreign investment properties in Bulgaria. On the complete contrary, what they did was get involved in lending towards the knitting together of community, bringing people together and helping each other out to the betterment of society overall. This is very different to an ordinary banking institution and it is for the betterment of the people. We should respect that and we should acknowledge the volunteerism. We need to keep them separate from the normal banking institutions and give them the regard they deserve.

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