Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

I am delighted to speak on this Bill on Second Stage. The main work will take place on Committee Stage.

I support the credit union movement for a number of reasons. I have been a lifelong member. I was in business, self-employed as a chartered accountant for many years. Only for the credit union movement, certainly in the 1990s, many of the small businesses to which the banks were not providing credit would not have survived without the credit union system. That needs to be acknowledged. Credit unions are not the same as the banks.

I am pleased the Government is putting in place enhanced and strengthened regulation in the financial and credit union sectors. It is important, however, that we do not throw out the baby with the bathwater, that we recognise the unique characteristics of the credit union movement and seek to preserve those while at the same time strengthening regulations that need to be strengthened. I welcome the work of the commission which has been comprehensive and has covered a range of areas.

The credit union movement, like the GAA, is in every parish in Ireland and is based on volunteerism The one aspect that comes across is that there is a genuineness about those involved in the credit union movement. For no personal gain, they represent their members and we should not lose sight of that. Credit unions are not banks. There is a need for a memorandum of understanding between the Central Bank and the credit union movement on how credit unions will be regulated. From my interaction with the credit unions in Limerick which do fantastic work, that is something that needs to be considered. Another matter relates to volunteerism. I specifically refer to section 15 of the Bill which deals with membership of boards of directors. A restriction is being included whereby no member can serve on a board of directors for more than nine years in any 15-year period. I suggest that should be extended by three years, making it 12 years in any one period.

On the issue of holding posts on a board of directors, it is proposed that there will be a restriction of three consecutive years. We should consider extending that to four consecutive years. Up and down the length and breadth of the country there are credit unions in which persons have been involved throughout their lives doing fantastic work. We cannot afford to lose their skill sets, but there is a need for probity. Under the Bill, if a sufficient case is put forward, the terms of those on boards and in office positions can be extended, and I welcome that.

We also need to examine the need for a shared service. This is a simple procedure. People have an attachment to their local credit union. We need to find a way to provide a shared service of a back-office function provided by a body to allow credit unions to meet their regulatory requirements and to continue as viable small credit unions. Above all else, the lifeblood of a credit union is its members. For that to continue, it must be able to pay dividends. We must get to a point with this regulation whereby all credit unions are able to pay dividends to their members.

The issue of the position of treasurer has been referred to. This is a matter of debate. He or she is a member reporting to the members' body. We need to have a mechanism whereby the role of treasurer can be retained for the members, involving the manager more in the finance area but retaining the role of treasurer as a position. We must always bear in mind that the credit union movement is about the members and the voluntary ethos. We need strengthened regulation, but we need to achieve it in a way that retains the voluntary aspect and the skill sets to which I referred, although there is a need for enhanced skill sets.

I commend everyone involved. I look forward to debating this Bill on Committee Stage, dealing with amendments and examining areas to strengthen both large and small credit unions to ensure their survival.

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