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

They came because they are concerned about what is happening to the credit union movement. They came because they care. They came as a cry for help to save a great movement. It is one of Ireland's greatest national movements. The starting point is to accept that there is a problem. If the Government does not accept this, we are going nowhere.

The Minister spoke at length last night about the Commission on Credit Unions, which focused largely on the regulatory structure. We all support its call for a strengthened regulatory structure. There is no issue with that. The commission's central recommendation with regard to the regulatory structure was that "credit unions should not be regulated on a one-size-fits-all basis; rather a tiered regulatory approach should be adopted". This has not happened, even though it was the commission's central recommendation in respect of the regulatory structure. The registrar proposed a tiered system in consultation paper 76. That was not consistent with the view or the spirit of the Commission on Credit Unions, which strongly recommended a system that would be reflective of the "nature, scale and complexity" of credit unions. Such a system would enable small credit unions to successfully continue to offer basic services with a lower regulatory demand on them, while enabling other credit unions that wish to expand the range of services they offer their members to put the necessary framework in place to get on with it. That is very explicit in the commission's report, but it simply has not happened.

The key issue in terms of regulation is the approach that is being taken. The spin from some Government Deputies is that we are trying to advocate lax regulation of credit unions, but that is simply not the case. The regulation of credit unions must be proportionate. Instead, we currently have regulation that is stifling, over-bureaucratic and heavy-handed. Under this form of regulation, which is not based on the basic principle of fairness, communication is very poor indeed. The entire regulatory structure that was put in place a number of years ago was based on the assumption that there were massive problems in credit unions throughout the country. Figures between €500 million and €1 billion have been cited on a number of occasions during this debate. Those massive problems have not transpired. I appreciate that there have been individual problems in credit unions, but they have been resolved at a minimal cost in the overall context. It has to be acknowledged that the structure which was put in place was based on the fundamentally false assumption that credit unions were in deep trouble in terms of their underlying financial health. That assumption has not proven to be the case.

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