Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank the Senators for their contributions on, and support for, this legislative measure which will formally amend the Credit Union Act 1997 to allow for general meetings, which are prohibited under the current health restrictions, to proceed. Some of the amendments will be permanent and will continue to operate after the interim period early next year. The Bill also amends the Fiscal Responsibility Act 2012 to allow for an increase in the number of consecutive terms which members of the Fiscal Advisory Council can serve. Furthermore, it amends the Credit Institutions (Stabilisation) Act 2010 to include the European Union as a facility lender, which will allow the State to comply with certain provisions of the SURE loan agreement. That agreement has been mentioned. It is an agreement in respect of support to mitigate unemployment risks in an emergency. It is specifically related to Covid.

The Government recognises the significant role of credit unions as a voluntary, co-operative movement, and how important it is for members to receive up-to-date financial information on the credit union as well as being able to have their say on a key range of issues, typically at an AGM. We hope the permanent changes being made will allow for greater participation at general meetings by the members of a credit union.

On some of the points made by Members, I accept the point that perhaps five members on the fiscal council was tight. We have a particular problem as there will only be two in situin the term of their office at the end of this year. We have to deal with what is before us. I agree, and it is a matter for future consideration, that if there were more members of the council, we might not find ourselves in this predicament of having only two, which might not even amount to a quorum at the end of this year. I accept the point and it would have been my instinct when I saw the legislation, but we must deal with what is in front of us.

On the issue of whether the legislation deals with voting at AGMs, like in a company, people can arrive with proxy votes representing a large amount of shares. The fundamental difference between credit unions and companies is that companies can buy shares. If somebody has 10% of the shares, he or she has proxy for 10%.This is a mutual association so every single person has one vote. Nobody can arrive with 10% or 3% of the votes. They can arrive only with one proxy vote. That is very important because there is a fundamental difference here. While we use the proxy vote and the procedures are like those in the Companies Act, it is fundamentally different because it is not a shared vote. It is a personal vote.

Senator Gavan asked about the changing of meetings and what was meant by the phrase "the end of the day". That means that if the board of directors deems it necessary to cancel a meeting, it can only do so up to the end of the day prior to the meeting, meaning midnight the night before. It cannot cancel a meeting on the day of the meeting but can do it up to the end of the previous day. That is what that particular item means.

We must understand that directors are volunteers and there is no liability attached to them if people say something untoward at a meeting or virtually and they are eavesdropped on. That can happen in the course of any event or at any meeting anyway and one cannot blame the chairman for it. If somebody says something wrong that person is responsible for his or her own actions. It is not the responsibility of everybody else in the room.

The gender balance of the Irish Fiscal Advisory Council was mentioned. That is important and essential and I hope whoever comes on as new members in due course will meet those criteria.

I do not think the legal position of the audit committee or supervisory board will be affected by this. They can still have their meetings but this legislation takes steps to prevent an AGM which involves large gatherings. Audit committees and so on are normally small meetings with small groups of people that can happen with proper social distancing when the time allows. This legislation should not impact on those meetings.

The review of the role of credit unions was mentioned. We are in favour of that and we just want them to lend more. They have a lot of excess cash, as all the banks do at the moment. There is a lot of money out there that institutions should be willing to loan in the new year once people are in the mood to start spending again.

Senator Conway mentioned that AGMs have an oversight role and a social element. I have not attended any AGMs that had music and dancing but obviously once they have their official business done they are entitled to relax. I do not object to that.

I wish to make a very important point because I understand this issue may have caused a bit of confusion. It was twice asked if the loan drawn down from the EU under the SURE loan agreement is for credit unions. Unfortunately, it has nothing to do with credit unions. We were bringing forward legislation relating solely to credit unions and it was decided in the last few weeks that it would be called the Credit Union (Miscellaneous Provisions) Bill. However, because of the issue with the Irish Fiscal Advisory Council, it was necessary to put this section in, which has nothing whatsoever to do with credit unions. We also had to include the other element as a result of the July stimulus legislation we brought through the Dáil and Seanad some months ago. It provides for the Minister for Finance, solely, to borrow the money from the EU. It has nothing to do with credit unions. We are piggy-backing those two sections into this legislation because they both need to be passed by the end of the year.

I can understand how some people might have thought these sections were connected to credit unions. Unlike the borrowing the State would normally do, with the National Treasury Management Agency, NTMA, raising loans to finance the State, this mechanism finances the current account of states across the EU for the exceptional costs they have incurred, such as those of the wage subsidy scheme, which has already been paid out. This loan agreement will come directly signed by the Minister for Finance, not by the NTMA, and it will be lodged to the Central Fund. It will be spent in the current account and the spending of that fund has already been approved through the Estimates process. Some of it will carry into next year as well. It is a direct loan into the current account to meet the financial cost of Covid this year and into next year. It will add onto the national debt but as a direct loan, which is a new mechanism for the EU to loan money directly to governments rather than through a lending agency such as the NTMA.

I have responded as best I can to some of the points made. I thank Senators for their input and look forward to progressing this legislation through the remaining Stages in the Seanad.