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

I have read the consultation protocol for credit unions and it does not do what I am or the Irish League of Credit Unions is asking for. I note the Minister's point that he does not want to have a statutory memorandum of understanding, but I again reiterate the point that the memorandum would not be on a statutory footing. The only thing that would be on a statutory footing is the requirement to have one. If the Minister is not willing to include it in the legislation, would he be willing to ask both parties to enter into a formal memorandum of understanding? This is not a one way street, but there is nothing in the communication protocol that actually places a requirement on the credit union sector. It only deals with how the Central Bank will consult the sector on new regulations. There is nothing in it that places a requirement on the credit union movement to understand how it will fulfil its side of the bargain in terms of the new regulatory regime. That is important because, as we know, a memorandum of understanding is a two way street and iabout having a better understanding of what is expected.

I take on board the Minister's point that there must be flexibility and that the Central Bank cannot have its hands tied. He seems to see a memorandum of understanding as somehow limiting the ability or power of the bank to intervene when it needs to and as being restrictive. The important point is that the bank will have to agree to the memorandum of understanding and scope can be provided within it to allow the bank to deviate from its provisions in certain circumstances. The key point about a memorandum of understanding is that it does what it says on the tin, namely, it allows the parties to understand each other. It is about making sure there is a clear understanding of what is required of both parties.

The credit unions will have their own view on the consultation protocol which was developed by the Central Bank and issued to them. The document in the Oireachtas Library is the second draft, but it does not represent the type of understanding about which I am talking. It could sit alongside such a memorandum because it would deal with how the bank would consult credit unions. If the Minister is not willing to accept the amendment and a statutory requirement to have a memorandum of understanding, I ask that, in the interests of better understanding between the two parties, he ensure there is an attempt by both sides to reach a formal memorandum of understanding in order that they would know how the regulatory regime would apply to them and what was expected of them.

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