Ned O'Sullivan (Fianna Fail) | Oireachtas source

Senator Gilroy could not resist the temptation to take another swipe at former Fianna Fáil Ministers. It would be remiss of me not to point out that former Deputy Charlie McCreevy was generally considered to be a reforming and successful Minister for Finance. He went on to achieve further successes in Europe. I will not discuss any other ex-Ministers for Finance.

I agree with Senator Gilroy that the credit unions are a success story in Ireland. That success story is in marked contrast to the failed story of their big brother counterparts in the major so-called pillar banks. It is inevitable, but nonetheless ironic, that we are legislating for the regulation of credit unions at a time when their counterparts still appear to be skipping along their merry way and turning their noses up at the Irish people. That is the context in which I will make my contribution on this Bill. Credit unions have ¤15 billion in customer deposits, even in today's tough times. A total of 2.9 million people in this country have deposits with credit unions. It is the largest number in Europe, in percentage terms. Credit unions are still giving out loans, although not as many as we would like, and are still in business.

In general, we welcome the Bill before the House. Stabilisation is badly needed for a small number of credit unions. It is a fact that 51 have reserves that are lower than the 10% standard and 25 of them are classified as being seriously under-capitalised. It is worrying that the loan-to-asset ratio of credit unions in Ireland is at 40%, as opposed to the international norm of 70%. These are the negative issues and they must be addressed. However, the concept of credit unions is based on the ethos of volunteerism and a sense of service to a community. I applaud the volunteers who are involved in credit unions and who have done such wonderful work. The Minister acknowledges that. The credit unions have always been a support to the small or low earner, the small businessman and the small farmer, who would probably be rejected everywhere else. Their contribution to society, particularly in small towns in rural areas, is exemplary.

There was a controversy regarding a credit union in my home town of Listowel some years ago. As with every controversy, there were two sides to the argument and it culminated in an extraordinary general meeting, EGM. The meeting had to be moved from the Listowel Arms Hotel, which has catered for large conferences, race meetings, writers' weeks and the like, because so many people came to the meeting. The manager had to cancel it on health and safety grounds. It had to move to the gymnasium, which holds up to 1,000 people. That sense of engagement on the part of ordinary people on an issue relating to their credit union demonstrates the sense of ownership people have towards their credit union. The credit union in Listowel was and is strong and is getting stronger all the time.

Some of the governance issues in the Bill are a puzzle for me. I welcome the amendment from 15 years to 12 years in respect of people stepping aside. It is a pity that was not the case in the major banks previously. There might have been a quicker turnover of bank managers at the top level and we would be much better off today. However, is it ageist to say that a person has been in place for too long and must step aside? There is much wisdom and experience with age so I hope that, under the rules, the expertise of the people who have given service and are then obliged to step aside will still be availed of and that they will still be able to have an input and, in due course, hopefully return to management or senior positions.

The legislation should not be anti-volunteerism. There are certain exclusions from board membership but I understand from what the Minister has said that he is softening on that somewhat. I welcome that. There is also a financial consideration for credit unions under the Bill in that it requires that 0.2% be paid into the deposit guarantee scheme. That will obviously make credit unions less competitive than heretofore. They will also be required to dig deep to finance the costs that will be incurred in implementing the new audit and regulatory regime, which will cost money.