Catherine Byrne (Dublin South Central, Fine Gael) | Oireachtas source

I welcome the opportunity to speak to the Bill. I broadly welcome the measures set out in it.

We are all very familiar with credit unions and the services they provide in communities. They also provide funding for projects. I am a member of a credit union. A framed photograph of the first loan cheque written by the credit union hangs on the wall of the credit union office. The cheque for £5 was written in the 1960s and was a significant sum at the time. In those times the credit union was regarded as the poor man's bank. Now there are more than 400 in the State, with 3 million members, and each credit union is owned and run by its members. Credit unions are not-for-profit organisations and the role of volunteers in the daily operation of credit unions has always been significant. For years credit unions were the only source of borrowing for many because banks were not an option for them. They would not have been granted a loan by a bank, even if they applied.

The local credit union is not judgmental of its members. It offers them a lifeline when they are faced with unexpected bills and once-off expenses for family occasions such as weddings and holidays or for car purchase. Nowadays, many turn to the credit union to help with college fees for their children. Credit unions know their members and of their ability to repay. They have a unique understanding of the personal financial circumstances of their members. They go the extra mile to help because they have a relationship with the person seeking a loan. Many members save a little at a time without ever applying for a loan. Some may save as little as €2 a week.

Many put aside such a sum to ensure that, on their passing, there will be money to pay for their funeral arrangements. Since credit unions are local, convenient and run by locals who understand customers' concerns, they are trusted. My experience of the local credit union has always been positive. The failure of the banks should not result in the penalisation of credit unions.When banks closed branches and withdrew services in many communities, credit unions took up the challenge and are now in a strong position to fill the gap and draw in new members.

The Bill introduces wide-ranging reforms for credit unions. I am fully supportive of better regulation in all institutions in the financial sector and do not understand why credit unions should be exempt therefrom. No organisation should be exempt from scrutiny to ensure it is run properly. Events in recent years have shown the sad effects of poor governance in financial institutions and how lax regulation led to reckless lending and very misguided decisions by lenders. We, therefore, need greater transparency in all sectors to protect customers and their money. It is important that this be achieved in the legislation.

The measures contained in the Bill will give effect to over 60 recommendations made by the Commission on Credit Unions, which recommendations were made over a nine month consultation period and agreed to by the members. The Bill aims to put extra financial safeguards in place for the sector and facilitate the merger of weak and stronger credit unions. This is important because there are weaker credit unions which do need the support of larger ones. I do not envisage any problem with the merging of some credit unions.

The Bill makes provision for the credit union restructuring board, known as the ReBo, which will engage with credit unions on restructuring. However, it will not apply to all credit unions, as some will continue to operate on a stand-alone basis provided they have a viable business-friendly model that meets all of the recommendations made.

The Bill gives rise to many considerations and some concerns, which I ask the Minister to consider, especially regarding the work of volunteers. Every Member has listened to comments on the importance of volunteering in all sectors, not least credit unions which are the backbone of communities. As such, we should continue to support them and the Government has done so in many ways. It set aside €500 million to recapitalise credit unions last year as many were in serious difficulty. The Bill is one step forward in protecting credit unions from future difficulties. I commend it to the House and ask the Minister to take on board what has been said by all Deputies. Credit unions are a home-grown product and have been in existence for a very long time. Without them, many people would never have been able to buy a car, have a family wedding, go on holiday or send their children to school. I hope the Minister will consider this.

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