Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I am hearing from credit unions that they are feeling the heavy hand of regulation. Legislation was passed to strengthen regulation of the sector because it needed to be strengthened. Credit unions have been damaged by the economic crisis, not just in their core business but also because many of them invested in expensive buildings which have had to be revalued. This is having a detrimental impact on their overall financial position. I refer to the parallel process of ongoing regulation by the registrar and ReBo which is trying the softly-softly approach as against the heavy hand of regulation. The feedback I receive is that many credit unions are prepared to change in that they recognise change is unavoidable. They recognise that because of the need to reach the necessary levels of compliance and achieve an improvement in systems and governance, the weaker credit unions will need to join stronger ones. However, there is a need for a carrot as well as a stick. The incentivisation of restructuring has to be to the fore. The money has to be made available and used because achieving this on a voluntary and co-operative basis is preferable to the regulator using the heavy stick and threatening to shut down a credit union immediately on a Monday morning.

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