Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I move amendment No. 7:

In page 9, between lines 33 and 34, to insert the following:"7.—The Principal Act is amended by the insertion of the following new section after section 26:

"26A.—(1) A credit union may, once the approval of the Bank has been secured and the necessary capacity and infrastructure put in place, promote, invest in, loan to, and/or contract with a credit union service organisation approved by the Bank (on such terms as the Bank considers appropriate) and engaged in activities and services of the credit union service organisation related to the routine daily operations of credit unions.

(2) Nothing in this section or the following provisions of this Part affects the operation of any enactment which is not contained in this Act and which, in whole or in part, relates to the provision of credit union service organisation activities or services.

(3) Credit union services organisation activities or services may include but are not limited to the following:

(a) clerical, professional and management services:

(i) accounting services;

(ii) internal audits for credit unions;

(iii) credit union risk and compliance;

(iv) management and personnel training and support;

(v) marketing services;

(vi) research services;

(vii) procurement related services;

(viii) debt collection services;

(b) electronic transaction services:

(i) automated teller machine (ATM) services;

(ii) debit card services;

(iii) electronic fund transfer (EFT) services.”.”.

This amendment relates to shared services. Some of the comments made by the Minister of State on previous amendments will be of relevance to this amendment as well. The Minister, Deputy Noonan, said on Committee Stage that certain shared services, which I described as "member-level services", are known collectively in the US as shared banking. That term has been repeated today. The Minister for Finance said that the issue of members' shared services was not discussed by the Commission on Credit Unions. He also said that back-end services were discussed by the commission. While the Minister was correct in the first instance, he was not correct in the second instance because the issue of member-level shared services was the subject of significant discussion by the commission. That discussion is reflected in pages 87, 88 and 89 of the commission's final report. I agree with the Minister that such services cannot be introduced overnight, but nobody is asking for that. Like hundreds of thousands of other people, my money is in the credit union. We need to ensure the issues of capacity and risk management, etc., are dealt with robustly. That should not prevent us from detailing in this Bill the services that could be available.

I have amended the initial amendment I proposed on Committee Stage to make it clear that these services cannot be commenced without the explicit agreement of the Central Bank and to provide that it cannot be done unless the individual credit union involved has demonstrated that it has the capacity to deliver such services. Some of the issues the Minister mentioned earlier, such as possibility of a credit union being caught out when money is withdrawn, would be dealt with because the Central Bank would have to approve it and the credit union would have to show it has the capacity to deal with it. All of that background work would have to be done.

The purpose of this amendment is to detail the kinds of shared services that could become available to members if credit unions have the required capacity and the support of the Central Bank. It is about detailing the future direction we want the credit union movement to move into. In the section of its report dealing with additional services, the Commission on Credit Unions states that it supports "a new regime for the provision of additional services". It is clear in the report that such services include both member-level shared services and back-end shared services. I urge the Minister and the Minister of State to consider this area. I agree with the concerns they have expressed in this regard. This should not be introduced overnight because the credit union movement is not ready for it, as far as I am aware. As I have said, this issue has been discussed by the commission.

A survey of credit unions outlined the five key areas where they would like shared services to be developed. In the case of electronic fund transfer services, it does not need permission anyway. There are four other areas. In fairness, the recommendations that have been made in this regard make it clear that the commission does not intend to specify the products that credit unions should or should not provide. The report makes it clear that "a new regime for the provision of additional services should be developed within the context of the tiered regulatory approach as set out in greater detail earlier in this Chapter". I urge the Minister of State to examine this recommendation. The credit union movement needs to be able to facilitate its members in the best way possible. While it is important that robust regulations are introduced on foot of this Bill to ensure credit union members and the State are protected - obviously, the State is having to step in with citizens' money in this case - it is also important that there is a future pathway for the credit union sector. This sensible amendment was modified after I listened to what the Minister had to say on Committee Stage. I am not saying that these services will be provided - I am saying that these services could be provided. That will not happen until the capacity of the credit union movement has been developed. The double catch is that it will not happen without the explicit approval of the Cental Bank.

See this speech in context