Tom Shehan (Fine Gael)

I welcome the Minister and thank him for his comprehensive overview of the banking sector. My questions are on the credit union sector and the imminent credit institutions Bill.

There has been much talk of the credit unions being in a great deal of bother owing to investments they made. Credit unions are run by volunteers. There are not too many chartered accountants, barristers or qualified experts involved in credit unions. The credit unions paid Davy's a high price for advice and lost the vast majority of their money in a product known as the Central Treasury Management Fund, which was approved by the Financial Regulator in March 2006. Can the Minister guarantee, by way of the proposed credit institutions Bill, that Joe and Josephine, just as they have done for the past 20 or 30 years, will be able to go to their credit union this Christmas for a loan of, say, €1,000? Will he remove the regulation that forbids credit unions from renegotiating terms and conditions on loans?

The Minister stated in his speech that changes are being implemented by the EFSF and EFSM to allow for longer loan maturities. While there are costs associated with this, borrowing over a longer term horizon is typically more expensive. The lengthening of maturities is beneficial from a cashflow perspective, as well as ensuring that the profile of redemptions is more orderly. In other words, the benefits exceed the costs. A report published last week states that there is approximately €1 billion of arrears on loans in credit unions. People are in arrears because credit unions are forbidden to extend terms and conditions on loans. Can the Minister guarantee that Joe and Josephine will be able to get their credit union loan of €1,000 this Christmas and will he remove the regulation that forbids credit unions from extending the terms and conditions of loans?