Feargal Quinn (Independent) | Oireachtas source

I am pleased to see the Credit Union Bill before the House. I had not realised the extent to which I was connected with it. My father was actively involved in the first two credit unions in Dublin. I looked up the Internet today and discovered that he was actively involved in 1955, 1956 and 1957 when the Dún Laoghaire credit union co-operative was established. I believe the Donore Credit Union was the first of its kind set up in Dublin. If I remember correctly there was one in Castleblayney or somewhere in County Monaghan as well. I grew up in a house where people were actively involved in the credit union co-operative movement. People such as Nora Herlihy, Seamus Mac Eoin and Brendan O'Cearbhuill were the founders in those days and they went on to establish something that has been worthy of support over the years.

I like to think that the steps we are taking today will enhance and build on the reputation of the credit union movement. While I welcome the updating of legislation on credit unions, we must at all costs avoid tarring credit unions with the same brush with which we have tarred the banks. It is fair to say that the banks deserve it. We all agree.

As someone who has lived through four or five recessions and done business in tough times during those years I am fully aware of how credit unions have provided a lifeline to many businesses and individuals. On occasion, banks simply would not lend unless they were given full security. Thus, credit unions were established for the people. We are getting to the point again where it is remarkably difficult for individuals and SMEs in particular to get loans from banks. This is where credit unions come in. In the nine months from October 2011 to June 2012 they provided ¤1.1 billion in loans to the membership. People would be a great deal worse off without this vital facility.

There is a great worldwide movement back to credit unions and what is termed community banking. Bill Clinton made an interesting comment recently. He remarked on how this was the way forward. When asked about the Occupy Wall Street movement call to shift billions of dollars from banks to smaller credit unions he said he believed it was a good thing. I do not think many people would necessarily agree with that, especially because the larger banks are reluctant to loan now. He suggested that one simple thing people could do was to put their money in a community bank sensitive to their needs. Such community banking is common in certain countries, including Germany. An SME funding bank was set up recently in France. Germany has two such banks while community banks in America lend to local communities. These banks are vital. We need to consider ways to attract or establish such banks in Ireland to complement our credit unions. This is something we should be able to achieve and such developments are important to consider.

During the boom the banks lost a great deal of their ability to know their customers. Has the Minister of State heard of a new bank that could be attractive option?

I have in mind a bank in Britain although I cannot remember the name of it. The head of the bank said: "We have chosen to operate through brokers rather than a branch network which makes us efficient and agile, and we make fast, robust decisions based on common sense and knowledge of our customers ? not a computer score." I admire this thinking because it harks back to when the banks knew their customers. Such co-operative banks pride themselves on this philosophy.

The Irish League of Credit Unions argues that credit unions should be leaders in assisting the Government in implementing its financial inclusion agenda. It maintains that this could be realised through the Bill. The legislation should encourage credit unions by permitting them to offer electronic payment accounts. This is a sensible idea to make it easier for the customer to do business and I believe the relevant provision should be included in the Bill. I offer an example of how this could be good for business in Ireland. In the United Kingdom the "one in, one out" system requires Government departments there to assess the net cost to business of complying with any new regulation proposed. This is an "in". Each time this is assessed, calculations are validated by the independent regulatory committee. If a new regulation means a cost to business, a deregulatory measure or "out" must be found to reduce the cost. If we are to succeed in making the Credit Union Bill do exactly what we want it to do we must ensure any steps we take enable the credit unions to have the freedom which they had in the past. We should not tie them down with more regulations, although we must ensure that some of the faults that occurred in the past do not recur in future.