Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I mentioned this issue on Second Stage. Amendment No. 3 relates to a matter Deputy Nash and I have raised concerning pre-voting. The legislation does not refer to post but rather to electronic means.

I wish to focus on one core part of the issue. The amendment is to delete the words ",whether before or", which would not allow for pre-voting. I know the Minister of State may say this is about enabling the credit unions to decide for themselves but if there is a belief that we should allow credit unions or banks to make up their own rules, then let them make up their own rules and let us not regulate them at all. The Oireachtas passes laws that allow or enable credit unions to do certain things and the question is whether this is an appropriate power for a credit union to have. The question is a genuine one that has been raised by the credit union movement itself on the impact the change could have on the integrity of the nomination committee. The concern has been raised by the Credit Union Managers Association, CUMA, and I hope it can be addressed by the Minister of State today.

In this section of the legislation the Minister proposes to introduce pre-meeting voting where members who are not present at the AGM can vote prior to it by electronic means or whichever means the credit union may decide. As the Minister of State is aware, the nomination committee is one of the key committees established under the Credit Union Act, so it is not insignificant. The purpose of the nomination committee is to ensure that nominees to credit union directorships meet the highest standards. This is something we discussed previously in other legislation in this House. It is an essential part of what is described as their fitness and probity regime, which is so important in financial institutions. A very difficult lesson was learned in that regard by the State, not with credit unions but with the banks.

The Minister of State will be aware that the Central Bank wrote to lenders and insurers on 17 November warning that they were failing to follow fitness and probity rules. These are in place to ensure key staff meet the highest standards of confidence, honesty and integrity. Fitness and probity are vital for lenders, including credit unions. As part of its process regarding nominees, the nomination committee shares a report with members, those who elect the directors. That report is shared by the nomination committee with the members and then the members elect the directors.

Under the credit union rules, this report is shared in advance of any voting but under section 6(4)(a) of this legislation, a mechanism is allowed whereby votes could be cast by members before a meeting, therefore suggesting that voting would be allowed to take place before the nomination committee sends its report to members. Consequently, members would be voting on the election of directors, which is crucial with respect to fitness, probity, integrity and all the rest, without the benefit, it could be argued, of having the nomination committee's report shared with them. That would be crucial in informing them of voting positions.

The matter has been raised with the Department of Finance by credit unions and it is really important that the Minister of State clarifies this. He commented that we can see how this will work out but perhaps in this case we should take a little more time and not allow for pre-meeting voting at this stage so we can have further discussions with the credit unions.

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