Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

These amendments provide for a memorandum of understanding between the Central Bank and credit unions. The commission recommended that a consultation protocol should be in place between the Central Bank and credit unions. Since we last discussed this issue on Committee Stage, that protocol has been developed, following consultation between the Central Bank, the Minister, the credit unions, representative bodies and the credit union advisory committee. The protocol was sent to all credit unions earlier this week. I have asked that it be placed in the Oireachtas Library and advise Deputies to have a look at it.

The protocol sets out how the Central Bank proposes to engage with credit unions in any formal consultative process prior to the introduction of the new regulations. The protocol states that the bank is committed to having clear, open and transparent engagement with stakeholders and fulfilling its financial regulation and supervisory objectives. The bank commits to engage formally and informally with credit unions, representative bodies and relevant stakeholders and to ensuring it complies with any relevant legal obligations relating to consultation.

The bank will consult on new regulations that will have a significant impact on the business of credit unions. As part of the consultative process, it will invite credit unions, their representative bodies and other relevant stakeholders to make written submissions which will be reviewed and considered before regulations are made.

It has been suggested a broader memorandum of understanding should be agreed between the Central Bank and credit unions. I understand one of the concerns driving this suggestion is that the Central Bank should issue written directions, but the Bill already provides for this, as well as for an appeals mechanism. I do not favour having a statutory memorandum of understanding, nor was one recommended by the commission. We should be careful not to undermine the independence of the regulator. We have learned enough from the financial crisis to know that the Central Bank must be able to act within its powers, when required. Therefore, I do not propose to accept amendments Nos. 45 and 46. The protocol has now been published and is available in the Oireachtas Library and I refer Deputies to it because it is comprehensive.

See this speech in context