John Gilroy (Labour) | Oireachtas source

Other commentators hailed McCreevy as the best Minister for Finance in the history of the State and perhaps in the history of the world.

I even recall someone calling for Mr. Sean FitzPatrick to be appointed chairman of the Central Bank, incredible as it seems. When these bankers were living it up, the managers of local credit unions were going about their business, quietly working away to meet the modest needs of modest people and no Act could ever endanger this. We must be cognisant of this.

In welcoming the Bill we need to take into consideration the nature of credit unions and in our attempts to improve their operation we need to take care that our actions will not have unintended consequences. As we amend the regulatory framework for the setting of requirements, we must not make changes to force the credit union movement to be something other than it is and move it away from its core role as a provider of credit locally. The Minister has consulted widely on the legislation and the deliberations of the Commission on Credit Unions have resulted in the main provisions of the legislation, while the Irish League of Credit Unions has campaigned for this regulatory framework.

A number of sections provide that credit unions must comply with requirements under financial legislation, but the nature of this is not clear. Perhaps the Minister of State might outline his thoughts on this issue. This is a substantial Bill, comprising 96 sections, and it should take us a great deal of time on Committee Stage to fully reflect on and tease out its implications for this important sector in the financial services industry.

The role of credit unions in other countries is filled by local banks and most of the smaller banks have survived the financial chaos. I urge caution and careful consideration, while bringing the Bill through the Oireachtas.

Section 8 permits credit unions to raise funds by issuing shares. Is there a risk that this could lead to the demutualisation of the movement, as happened with building societies, which led to significant damage?

Section 10 provides that where a person who lends money to a credit union or accepts security on that loan where he or she knows the credit union is breaching its requirements, the debt and security are unenforceable. I have reservations about this, as it provides for two undesirable courses of action. In the first instance, it might permit credit unions to act outside their remit by specifically mentioning section 10 and, second, if the section stands, it might place an onerous burden on credit unions to demonstrate that they are acting within their remit.

The key stakeholders have agreed to most of the 60 recommendations, but, like Job in the Bible who was terrified by the gathering of the mob, I am always terrified by the gathering of consensus. Has the Minister of State concerns about this? Consensus is always dangerous and it is strange when we agree we need to be critical. The role of the House is to fully tease out what we are doing and if two previous Seanaid had done their work properly, we might not be in the mess we are in. It is important, therefore, that we be highly critical of changes to financial services regulation. Has the Minister of State concerns about this consensus? I am glad he said the Minister was taking on board proposals made on Committee and Report Stages in the Lower House.

I look forward to a full debate on Committee Stage. We need to move with caution regarding a movement that has served the country well and continues to do so. Sometimes in this country when the pendulum swings too far in one direction, we tend to jump in and ensure it swings too far back the other way. Does the Minister of State believe the Bill is proportionate and that there is a need for these measures?