Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I am also sharing time with Deputy John Paul Phelan. I welcome the opportunity to say some brief words on the Bill. Coming from the constituency of Cork North-West, the home place of Nora Herlihy of Ballydesmond, I am acutely conscious of the ethos of the credit union movement and the reach it has into local communities. The financial rot that engulfed the State in recent years did not happen only to high street financial institutions. The fact that we are responding with legislation on credit unions reflects the involvement, to one degree or another, of all financial institutions in the State and our need to take another look at the regulatory framework within which they exist. For that reason, I welcome the legislation. Broadly speaking, it is the result of the work of the Commission on Credit Unions, which engaged extensively with stakeholders over a protracted period of almost a year. It is giving effect, in legislative format, to some 60 recommendations made in the commission's report. The Irish League of Credit Unions was party to the commission, but I understand that although it may have taken a view at a certain level, there are concerns within the movement. I have been contacted about those concerns by communities who are at the coalface of delivery of services through the credit union movement.

Primarily, however, the legislation is about prudential requirements for credit unions, which reflects the fact that we are dealing with local citizens' money and that we must be prudent in this regard. It deals with governance and restructuring requirements. Obviously, that will be unpalatable in local communities where the credit unions tend to be part and parcel of community identity. Telling one local parish credit union it may have to merge or join with another is a difficult task. There is also a commitment with regard to the State putting its money where its mouth is, and rightly so. The State is saying, in effect, that it acknowledges the difficulty the credit union movement is in and is prepared to bail out individual credit unions. That would be only fair given what taxpayers have been asked to carry already. The Minister is to be congratulated on that.

I acknowledge that there are difficult days ahead for individual credit unions. The requirement to put terms on the length of service of directors is a difficult one. We tend to celebrate the volunteer ethic, but if one looks at any community one will see that those involved are a handful of people, the same ones who volunteer in every organisation. They are in the GAA, political parties, the credit union movement and the community council. We are not oversubscribed with volunteers, and that will be a challenge. None the less, the lifeblood of any credit union is in new voices. If one becomes a prisoner to the same faces all the time, there is scope for complacency. Although the directorial time limits represent a challenge, it is not a bad idea, and one we might tease out further on Committee Stage. I refer to the issue of treasurers. It is important to separate the governance role from the manager's role. We can examine this on Committee Stage, but I do not think it is a bad idea. It is important that the Central Bank recognises and differentiates its engagement with the credit union movement. It must develop a protocol in that regard which recognises that credit unions operate based on a volunteer ethic whereby most of those involved do not work full-time.

I welcome the legislation. It is important that we empower credit unions to respond to a changing 21st-century environment and that we put them on a firm basis. Finding new blood and new directors will be a challenge but every credit union should aspire to having new faces and new ideas. I disagree with Deputy Fleming on the issue of staff members being directors; in my view, that is not a good idea. It could lead to capture in terms of the proper decisions that need to be made. The proposed measures for clear differentiation and good governance show that the Bill is taking us in the right direction.

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