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

The Department of Finance and I have a very good relationship with the credit union movement, both at national level and with individual credit unions around the country. The Deputy will recall that when the legislation to restructure the credit union movement was brought before the House, many amendments were suggested by Deputies on behalf of the movement. All issues were resolved by dialogue. Uniquely, the Credit Union Bill passed all Stages in the Dáil and the Seanad without a division. That shows the very good relationship that not only I but also Deputies Michael McGrath, Pearse Doherty and others have with the credit union movement.

In addition, the Government has committed to spend €500 million in restructuring the credit union movement. Where there is impairment, funds will be provided to repair, where necessary. The Central Bank, of which the credit union director is an employee, has decided to carry out a pilot scheme to see if arrangements for the debts of persons with borrowings from a number of sources, including credit unions, can be made informally. To examine how this might best work, the Central Bank is bringing in outside expertise in running the pilot scheme which, of course, like all pilot schemes, will not be set in concrete. Different approaches will be tried and we hope there will be a permanent scheme drawing on the experience of what does and does not work.

There is a particular problem where people are indebted to a number of creditors, especially when somebody has a mortgage with a bank or a building society where the debt is secured and a loan from the credit union where the debt is not secured. How to deal with secured and unsecured debt is the essential ingredient in terms of why the pilot scheme was advanced. I understand discussions are ongoing. I hope the Central Bank in its talks with the credit union movement will secure full participation in the pilot scheme in order that there can be an informal system in parallel with the systems in place under the insolvency legislation.

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