Joe Carey (Clare, Fine Gael) | Oireachtas source

People like and trust their credit union. The Irish, more than citizens of any other European country, have bought into the credit union movement. Our participation rate in the movement far exceeds that in any other European country. The Government, through its legislative programme to deal with credit unions, has to take cognisance of this fact and I am happy that, to date, this has been explicitly expressed and acknowledged by the Minister for Finance. As the Bill progresses, I hope our almost unique relationship with the credit union movement will continue to be reflected and acknowledged. I am happy that the Commission on Credit Unions was established and had a constructive input in drafting the legislation before us.

Under the terms of our current funding arrangements with the European Union, the European Central Bank and the International Monetary Fund, reform in this area is a requirement. In acknowledging everything is not rosy in the garden, one must acknowledge that the vast majority of credit unions are well run, financially robust and properly structured. The Bill largely reflects the recommendations set out in the final report of the Commission on Credit Unions, published in March this year. I understand the commission met on up to 30 occasions and was thorough and comprehensive in its work and deliberations. We cannot afford to lose the ethos of the credit union movement and also must ensure a regulatory and supervisory structure that will protect the financial interests of society as a whole. That is what the Bill is about. These points are all the more acute in the light of what we have seen take place in the banking sector, the institutions in which have broken the country. There is a somewhat justified feeling that credit unions are suffering for the sins of others in the financial services sector. There is a grain of truth in this, but it must be acknowledged that while credit unions are relatively small in the greater scheme of things, there are problems in a minority of them. I do not want to see the credit union movement damaged in the longer term for want of reform on foot of our new banking and financial circumstances.

The founders of the credit union movement in the 1950s recognised a double problem, the scare availability of money and the poor management of money. Credit unions were established to empower ordinary people to gain more control over their finances. The credit union movement has been very successful and it behoves us to ensure the principle and ethos of financial services rooted in the community can continue to flourish in what will be very different times. I understand, respect and admire the voluntary aspect of credit unions. We have many fine credit unions in my constituency of Clare. My late grandfather and namesake, Mr. Joe Carey, was a founding member of my local credit union, Ss. Peter & Paul Credit Union in Clarecastle where, incidentally, I participated as a supervisor for a period.

Like all Members, I have received correspondence from the credit union movement which has concerns about the Bill, including in respect of the application of the Central Bank (Supervision and Enforcement) Bill 2011 to credit unions. The movement considers the Bill should support the sharing of services in order that members can avail of a wide range of services. It has concerns about the term limits on directors of credit unions and the prohibitions on members of boards of directors. It is asking that a memorandum of understanding be agreed between credit unions and the Central Bank and wants the position of treasurer to be retained. There is concern that the tiering of credit unions is too wide. In this regard, the movement believes a model based on the risk posed to and the complexity of business would be far more appropriate. When the Minister for Finance is concluding the debate on Second Stage, he should take on board these concerns and introduce amendments on Committee and Report Stages to address them, if necessary. The process used to get to this point and the Minister's comments in introducing the Bill indicate the Government's willingness to recognise the specific circumstances that can be accorded to the credit union movement. I look forward to changes being made to the legislation as it passes through the Houses.

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