David Norris (Independent)

I thank Senator Twomey for so generously sharing time. I cannot understand why the Government could not accept the amendment tabled by Senator O'Toole. Apart from any other consideration, the Senator possesses quite an amount of knowledge in respect of this matter because he is a founder member of a credit union. He has placed before the House certain clear facts which are apparently inarguable. As far as I can see, the Minister of State replied to them with bluster and assertion and I am surprised that he would do so.

I heard a report on the BBC World Service in respect of an Indian national — I believe he is a doctor — who is one of the originators of microfinance within his country. The immense good that can be done by the spreading of comparatively small loans out into communities is what I have always understood to underpin the notion of credit unions. I have various friends who are members of the credit unions in RTE and elsewhere and I am aware of the wonderful work these institutions do in supporting ordinary people. Credit unions provide people with loans to purchase cars, pay for weddings or funerals or fund repairs to their homes. Such lending is extremely socially constructive in nature.

When listening to the radio again in recent days, I discovered that the Mitchelstown credit union, which I hope will survive and prosper, has 17,000 members and had got above itself to some degree. I understand that some of the loans it has extended to people were for amounts up to €250,000. I would imagine that a loan for this amount represents exactly what is meant by a sub-prime mortgage. I presume that one would use €250,000 either to support another loan which has gone bad or to finance the purchase of a house. This matter gives rise to serious cause for concern.

I was trying to recall the identity of a certain person who was involved in the foundation of the credit union movement in Ireland 50 years ago and I realised that Marian Finucane's aunt was the individual in question. Ms Finucane often speaks about her aunt with great pride and she is perfectly right in doing so.

More than 50% of the Minister of State's contribution related directly to the amendment tabled by Senator O'Toole. One of the points he made, which was extremely instructive, is that the Financial Regulator does not have a very good track record. Regulators in this country are, in general, under suspicion. In addition, the Financial Regulator lacks teeth. When the House debated the legislation relating to libel, I raised a question as to whether the word "direct" actually means command. Those on the Government side stated that it does not mean command and provided legal definitions to support their assertion. They cannot have it both ways. Either the word "direct" means that one can command or inform people to implement a particular regime or else its meaning is different. The Minister of State indicated that the word "direct" does mean to command but Government advisers previously stated that it implies no such meaning. It seems the Financial Regulator is quite ineffective if it can only exhort institutions to take certain actions but does not possess the means to compel them to do so.

A clear conflict of fact has arisen in respect of the matter under discussion. Senator O'Toole referred to loan impairments and difficulties relating to liquidity. I had a brief, whispered conversation with the Senator — I hope it did not disturb other Members to any great degree — and I understand the Irish League of Credit Unions, ILCU, has been the subject of appeals from a number of credit unions which are in difficulty and which are seeking funds to improve their liquidity. The ILCU refused their requests.