Tony Killeen (Clare, Fianna Fail)

It is important to bear in mind that the wording of section 35 differs dramatically from that in the Bill as published originally. I took the Bill on Report Stage in the Dáil when eight substantive changes were made by the Minister, many arising from points made by Opposition spokespersons and others, as well as those made by Senators Keaveney, Alex White, Donohoe and MacSharry. There is an acceptance of the importance of the credit union sector, particularly for people who for a variety of reasons, not least that they are the least wealthy, tend to have less access to banks.

It is also important to bear in mind that there are advantages for credit unions in running with the situation as is currently proposed. One of the effects of the amendment, if enacted, would be to make the commencement of the provisions amending section 35 of the Act of 1997 contingent on an order made by the Minister for Finance and approved by both Houses of the Oireachtas. Additionally, the amendment would oblige the Minister to undertake and publish a report on the impact of the provisions on credit unions generally. One of the impacts of that would be that there would be considerable delay. It is important that the provisions be enacted quickly to make it possible for credit unions to have the increased flexibility to reschedule loans, subject to appropriate liquidity provisioning and accounting requirements, and so that credit union members can benefit from this. If the amendment were accepted it would delay the introduction of the provisions and thus undermine the original rationale for their introduction. In addition, section 2 already provides for the commencement arrangements. Therefore, if the amendment were to be accepted it would be in conflict with another part of the Bill.

With regard to the impact of the provision on credit unions generally, the Registrar of Credit Unions indicated to the Joint Committee on Economic and Regulatory Affairs on 27 May, that the registry had carried out an impact analysis which examined the level of provisions held against rescheduled loans. It is not clear, therefore, that a further assessment in this regard is necessary. Also, the strategic review of the credit union sector will provide an early opportunity to review the operation of the measures relating to credit unions, including the amended section 35 provisions. That was the point made by Senator MacSharry. We expect that report will be ready in spring 2011.

As the Minister and other speakers said earlier, the Bill is the first of a suite of three. Therefore, there will be opportunities to revisit issues of concern or that cause difficulty. At this point, the best balance is struck by the provisions as currently provided for.