John Paul Phelan (Fine Gael)

I welcome the opportunity to discuss the credit union movement and thank Senator O'Toole for bringing forward this Bill. I am in complete agreement with the Senator on the issue of savings protection but do not agree on the mechanisms he proposes. I am thus in a quandary in that regard. I believe everybody would support the principles behind the Senator's proposals because an enhanced savings protection scheme is clearly needed. Senator Quinn and the Minister of State referred to the discussions which are taking place between the registrar and the ILCU. These discussions seem to have dragged on for a long period of time, so if this Second Stage debate can provoke a conclusion in the shorter term, we will have achieved something.

The credit union movement has been a strong pillar in the economic development of the country over the past 25 years. Before the arrival of the Celtic tiger and at a time when other financial institutions were not offering credit, the credit union network provided loans to thousands of people. The credit union movement deserves credit for the successful efforts it has made during its history. Approximately €12 billion is held currently in credit union savings accounts by more than 2 million members. I confess that I do not have a credit union account because the movement has not had a strong history in my area. However, I am familiar with the role of credit unions in rural Ireland. We have discussed in this House and elsewhere the breakdown of rural communities over the years and the issue of bank closures in large rural towns. Credit unions are now the only financial institutions present in many towns. They should be supported and congratulated at every opportunity for the fact that they continue to provide a vital and viable service to the public.

I have raised on a number of occasions in this House the high level of indebtedness in Ireland. In the past two years, an additional €118 billion in debts was accrued by the citizens of this country. That is a startling amount of money. I would be positively disposed to any legislation, such as this Bill, which would offer protection to credit union members. I have a number of reservations, however.

Senator O'Toole referred to the all-Ireland nature of the credit union movement, which we should promote at every turn. We should ensure that whatever framework is put in place extends across the 32 counties because one of the feathers in the cap of the Irish League of Credit Unions is its Thirty-two County basis. I also concur with the Minister of State that it does not make sense to propose new legislation while the discussions are ongoing. We should await the conclusion of the discussions and hope they will bear fruit sooner rather than later.

The Bill also proposes the establishment of a credit union savings protection agency. Were such an organisation to come into being, the issue of its operation would require discussion at some length in this House.

I express my wholehearted support for the principle of protecting people's savings in credit unions. However, I am unsure whether the Bill as proposed is the correct mechanism to so do. Members should wait for the conclusion of the discussions between the registrar and the representatives of the credit unions on the establishment of an agreed mechanism for savings protection. That route should be taken if it can be achieved in the short term.

I again commend Senator O'Toole on introducing this Bill before the House, thus facilitating the opportunity to have this debate. However, Members probably should hold fire until the conclusion of the discussions between the registrar and the credit union representatives.