Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

We are dealing with amendments Nos. 16 to 22, inclusive. I will deal with Deputy Doherty's question about the progress on some of the commitments given by the Minister for Finance on Committee Stage. I am aware of the discussion that occurred.

Amendments Nos. 16 to 22, inclusive, relate to board membership. Amendments Nos. 16 and 17 relate to section 15(10)(a). As highlighted on Committee Stage, one of the core purposes of the Bill, as expressed in its Long Title, is to change the governance requirements for credit unions by removing certain management functions from boards of directors of credit unions, providing for a separate management structure and to improve the oversight and general policy functions of the board.

The core change at the centre of the governance provisions is to separate the role of the board in overseeing the operations of credit unions from the day-to-day operations. These exclusions are designed to ensure that individuals do not oversee their own work and are answerable to themselves as a result. Exclusions from board membership are specifically recommended in the commission report and were examined in some detail by the commission. These exclusions were agreed by the Irish League of Credit Unions. These exclusions were also discussed in great detail on Committee Stage and to which colleagues have referred.

The exclusion in this subsection only, prevents a voluntary assistant from being a director at the same time. That is, there is nothing to stop a person from being a volunteer holding a position on a board otherwise. The risks of a conflict of interest are much lower in the case of a volunteer at another credit union as such a person will have no financial or employment interest at stake. As the Minister flagged on Committee Stage, on that basis, he is considering removing voluntary assistants of other credit unions from this provision.

Amendment No. 18 would amend subsection (10)(b) to allow a person sit on a board of one credit union and also be responsible for overseeing the board of another, possibly neighbouring, credit union. The Minister stated on Committee Stage that he accepted that the Bill contains safeguards regarding conflicts of interest and that a member of a board oversight committee at one credit union could bring significant skills to bear on the board of another credit union. As I have outlined, the Minister stated he would reflect further on this case. However, the priority will be to avoid any conflict that might compromise the best interests of credit union members.

Amendment No. 19 seeks to amend subsection (10)(c),as raised on Committee Stage. If this amendment were to be accepted, it would allow a director of one credit union to also become a director of another credit union. Members need to have confidence that board members are free from conflicts of duty and also conflicts of loyalty. A director who must make decisions about business strategy or a possible amalgamation, may find it difficult to maintain sufficient objectivity where the decision might also affect the neighbouring credit union of which he or she may also be a board member. Therefore, I do not propose to accept amendment No. 19.

If accepted, amendment No. 20 would allow employees of representative groups to sit on credit union boards even where to do so could expose them to a potential conflict of interest. As stated on Committee Stage, the Minister did not propose to accept the amendment on that occasion. I note the Irish League of Credit Unions made it expressly clear when it came before the joint committee in September that it had no difficulty with this particular exclusion. It is not proposed to accept amendment No. 20.

Amendment No. 21 relates to subsection (10)(m). The amendment would allow a person who is in arrears for more than 90 consecutive days under a debt obligation to that credit union, to sit on the board. The core functions of boards of credit unions are lending, provisioning and credit control. Allowing those with a manifest arrears problem to remain on the board and to continue to make key decisions about lending and arrears in the wider credit union, creates potential for conflict of interest. However, I am sensitive to some of the concerns raised by Deputies about how this might be handled. Therefore, the Minister has undertaken to examine the issue with the Office of the Attorney General, with a view to bringing forward an amendment to allow this matter to be dealt with in the rules of the credit union. We do not propose to accept amendment No. 21.

Amendment No. 22 relates to subsection (10)(m). It would allow family members or voluntary assistants to serve on the boards of credit unions. This provision was specifically recommended by the commission to avoid conflicts of interest where the board members must undertake effective oversight of volunteers, including members of their own families. Given that the Bill also provides against conflict of interest, it will be important to retain sufficient scope to draw on a sufficiently wide pool of volunteers. On that basis and subject to further consultation with the Office of the Attorney General, I intend to bring forward an amendment on that issue. Therefore, I am not prepared to accept amendment No. 22 in its current form.

I refer to some of the issues raised on Committee Stage. The Minister gave commitments in respect of a number of these matters. I do not need to remind the House that when the Minister gives commitments he delivers on them. The difficulty is that the time schedule between now and the Bill being considered in the Seanad is quite short. The amendments will require a formal approval by the Government. We are working with the Office of the Attorney General in respect of the precise wording. The Minister has given a commitment and he reiterates he will bring forward amendments in the other House.

The benefit of that is that any amendments made to the Bill by the other House will have to come back to this one to be agreed before the legislation can be enacted. That commitment stands. The Minister's dilemma, and mine, concerns the short legislative period available, notwithstanding that this is a matter for the House. I do not attempt in any way to second-guess the decision of the House but the Minister has asked me to say his commitment stands. The amendments will be discussed in the other House. If any are accepted by the Seanad, they will be discussed and decided upon in this House. The Minister is very cognisant of the very good discussion on all these matters on Committee Stage. He will honour the commitments he made.

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