Mick Wallace (Wexford, Independent) | Oireachtas source

I met representatives of the credit unions recently and they were broadly in favour of the Bill but concerned about some aspects of it the first of which was the proposal to apply historic Central Bank legislation from 1942 to 2011 to credit unions, which was not considered by the Commission on Credit Unions. They consider that to be unfair and believe it should not form part of the Bill.

We all know that credit unions are very different from banks. They have served a wonderful purpose and many people who access money through the credit unions would not have a prayer in terms of getting it through the banks. Credit unions did wonderfully well to come out of the crisis in the way they did. They have allowed for €900 million of bad debts but they have reserves of €1.3 billion. The Government is putting some money into them but they are not getting that for nothing. They will give it back through a levy. They are not being bailed out, unlike their bigger friends in the banks.

I am in favour of legislation for all forms of activities in the State but this legislation is somewhat heavy-handed for what are volunteer run, not for profit organisations. That must be taken into consideration in the Bill.

Another area the credit unions were keen to get was the sharing of services. The ability to take money from a credit union in Donegal even though one might be from Wexford is very important. That would be a wonderful facility for the credit unions to have and I do not understand how the Government could see that in negative terms. I understand the reason the banks would not like it very much, and I believe they have done some lobbying on that matter, which is somewhat worrying, but the notion that the credit unions could become even stronger and provide an even greater alternative to the banking system should be seen by the State as a positive rather than a negative development, especially given that this Government promised us a strategic investment bank that would be open for lending to small and medium size business. That did not materialise on the basis that our pillar banks would do all that for us but as we are aware, that has not happened. Unfortunately, the pillar banks have remained closed to most small and medium sized business.

The other issue the credit unions mentioned was the term limits. As Deputy Flanagan stated, the notion of limits on lengths of service in principle is a good idea but I would have started with the banks rather than the credit unions. It must be remembered that the banks, not the credit unions, caused most of the problems and it might be somewhat challenging for small credit unions in rural areas to replace personnel who were there previously. Perhaps the Minister should insert a provision to the effect that allowance should be made for small credit unions in rural areas and different limits imposed on them. I suggest that he consider limits to the large financial institutions that have cost the taxpayer a fortune. I will not talk about the crazy amount of money they are getting despite the fact that those who need it most are being denied it.

I understand the credit unions have approximately €5 billion available for lending and that the legislation must be adapted to allow the Government take money from the credit unions. The credit unions would be keen to lend money to them at a standard rate, especially for social projects. Obviously, they will not give it for projects they do not agree with but there are many projects of a social nature that are in need of infrastructural investment with a view to creating jobs. This is a "no brainer". Members on the opposite side of the House frequently ask us where will we get the money but the credit unions have €5 billion to invest in projects of a social nature that could create huge employment. Unemployment must be one of the major curses on this State and on the world in general. There are 28 million people unemployed in the European Union and until the unemployment problem is addressed we will not get out of this crisis.

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