Wednesday 14 November 2012
The Bill is extremely important. There are over 400 credit unions and the legislation will give effect to the recommendations contained in the final report of the Commission on Credit Unions. These recommendations were supported by the Irish League of Credit Unions, the Credit Union Development Association and the Credit Union Managers Association. There are four clear headings under which the Bill can be considered, namely, prudential regulation, governance, restructuring and stabilisation. It is in the context of these headings that I wish to address a number of points.
I spent a number of years on the supervisory committee of Bishopstown Credit Union. I attended meetings of the board and dealt and engaged with its members, other staff and members. As someone who saved with and borrowed from a credit union, I am aware that the importance of the movement throughout the country is not to be underestimated. In preparing for this debate I spoke to a number of people involved with credit unions in Cork city.
More than half of the credit unions, 211, have assets of €20 million or less, while three quarters, 285, have assets of less than €40 million. Let us place this matter in context. Credit unions are often small community organisations which meet the needs of their members. They often offer a more personal and direct service than that offered by the banks. They allow people to borrow money to buy cars, finance holidays, carry out home improvements, etc. It is the not-for-profit and community involvement which distinguishes the credit union from the bank. I stress that it is a movement. Therefore, we must ensure, in the context of changes we might make, that this distinction will remain in place and that the authenticity of the movement will continue. It is extremely important that we ensure that, even though they will be operating within a new regulatory regime, credit unions will be in a position to continue to cater for the economic and social needs of their members. We must not allow a situation to develop – either through the enactment of this Bill or otherwise – where loan sharks and those who illegally lend money can continue to flourish and prosper from their activities and prey on people and communities.
Having worked as a volunteer supervisor with Bishopstown Credit Union, I am aware that credit unions work with people in restructuring loans etc. There are ten community-based credit unions in my constituency.
Community-based credit unions offer great service to members, be they in Ballinlough, Ballyphehane, Bishopstown, Chríost Rí, Crosshaven, Douglas, Passage West, Monkstown, St. Finbarr’s, St. Michael’s or The Lough. Each one of those ten credit unions is in place to serve its members and work with them. That voluntary ethos must never be lost. We must promote the credit union movement, as credit unions are not banks. I agree with Deputy Eamonn Moloney that if a credit union member in Bishopstown, The Lough, Malin Head, Glenties or anywhere else north, south, east or west wants money, he or she should be able to get it from any credit union office in any part of the country.
Concerns about the Bill have been expressed to me by members of credit unions. One concerns the imposition of a time limit on the term a director can serve and the prohibition of membership of boards and oversight committees. The term limit will pose a difficulty for some smaller credit unions. It is not a big issue, however, for credit unions such as those in The Lough or Bishopstown which have wide catchment areas. The Bill provides that the offices of risk management officer and compliance officer should be held by separate officeholders. I refer to the need for an explicit regulation on the use of shared services. This would enable the credit unions which do not have sufficient volume of work for two full-time positions to share the services of a competent professional. The Irish League of Credit Unions has asked that this provision be included in the Bill. We must ensure credit unions are accessible, that technology is provided for the benefit of members and staff. I encourage people to continue to use their credit union and ask the Minister to listen to some of the concerns expressed in the debate. The credit union movement is different from the banks; we cannot expect credit unions to be the same as banks.