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Credit Union Bill 2012: From the Seanad (Continued)

Thursday, 13 December 2012

Dáil Éireann Debate
Vol. 786 No. 3

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  4 o’clock

(Speaker Continuing)

[Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty]  Amendment No. 124 deals with that issue to a certain degree.

Deputy Brian Hayes: Information on Brian Hayes Zoom on Brian Hayes The length of service.

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty It allows for the Central Bank asking the credit union to appoint an additional person and the term limits are waived.

Deputy Brian Hayes: Information on Brian Hayes Zoom on Brian Hayes Yes, if they can find someone.

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty It deals with the term limits issue in one way. I will discuss this matter further when we come to that group of amendments. However, it does not deal with the issue of a voluntary worker or a person working for another credit union. The issue of term limits could also apply in this instance. I suggest a waiver if the Minister of State is not willing to remove it altogether. Amendment No. 124 could have been expanded to include dealing with the prohibition on serving as a director in the case of voluntary assistants and staff of another credit union. It would be solely at the discretion of and with the permission of the Central Bank. This might be another way by which we could have addressed the issue. I suggest we return to it at a later stage.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath I welcome the amendments which represent progress and improve the Bill. I welcome, in particular, the amendment dealing with directors who find themselves in arrears. An amendment was necessary in this case. The restrictions are unnecessarily onerous, particularly when it comes to volunteers. It is often the case that the members of a board of directors are mature in years with time on their hands. It could be argued that working voluntarily for the credit union every week enhances their role as board members and gives such individuals a greater understanding of the operation of the credit union. This restriction is unnecessary, but it remains to be seen how it will work in practice.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett I agree with others that the Bill has been improved substantially by meeting some of the concerns expressed. I echo the points made about the removal of the exclusion on persons in arrears. However, the democratic principle of credit unions may be somewhat undermined - the right of members to make these decisions and judgments about the people they wish to serve on the board. I welcome the improvements, but the Minister of State should keep an ear to concerns or problems that may arise as a result of the exclusions which continue to be provided for in the Bill.

Deputy Brian Hayes: Information on Brian Hayes Zoom on Brian Hayes I agree with colleagues that the amendments have improved the section substantially by doing away with the more ridiculous exclusions. However, there is a fundamental distinction between a volunteer and an employee or a director. The credit union is a unique organisation which has given so much to the country. We need to arrive at the correct balance. The next group of amendments deals with the term limit - 12 years out of 15. I made the point yesterday on Report Stage in the Seanad that it was only when the Bill was passed by both Houses and became law that all these sections would apply. For example, a person may have served for 30 years, but he or she will only be appointed as a director next year. The Bill will be another transition for the credit union movement and it is certain this issue will be considered again in the next few years. I understand the point made by Deputy Pearse Doherty. The next group of amendments provides that the Central Bank is empowered to put to one side the exclusion if a credit union cannot find people because of the term limit. The Deputy has argued that the same should apply to volunteer and employees. I understand the logic of his argument. When this new regime and the transition period begin, we may need to look at any problems with the exclusion of volunteers. Beginning with the report of the commission, there has been an argument that this distinction is needed to ensure potential conflicts of interest are minimised and that the best governance system will be in place for all credit unions.

  Seanad amendment agreed to.

  Seanad amendment No. 36:

Section 15: In page 20, to delete lines 16 to 28 and substitute the following:
“(m) a person who is a spouse or civil partner, parent, sibling or child of a director, board oversight committee member or employee of that credit union.”.

  Seanad amendment agreed to.

  Seanad amendment No. 37:

Section 15: In page 20, to delete lines 32 to 49 and in page 21, to delete line 1.

  Seanad amendment agreed to.

  Seanad amendment No. 38:

Section 15: In page 21, line 2, to delete “(14) A member of” and substitute “(12) A member of”.

  Seanad amendment agreed to.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt Seanad amendments Nos. 39, 41, 64, 66, 112 and 124 are related and may be discussed together.

  Seanad amendment No. 39:

Section 15: In page 21, line 4, to delete “9 years” and substitute “12 years”.

Deputy Brian Hayes: Information on Brian Hayes Zoom on Brian Hayes I tabled a number of amendments on Committee Stage in the Seanad to increase the term limits of members of the board of directors. This arose from discussion with colleagues opposite on Committee and Report Stages in this House. On Report Stage the Minister for Finance had stated he intended to bring forward an amendment, following consultation with the Office of the Attorney General, to change the term limits to 12 years in aggregate in a 15 year period. This commitment is now reflected by the amendments made in the Seanad which strike an appropriate balance between promoting board rotation and protecting the volunteer ethos of credit unions. Seanad amendment No. 66 is consequential on this amendment to increase the term limits from nine to 12 years. Seanad amendment No. 64 increases the maximum consecutive term for the chairman from three years to four. The term of office of the chairman is for a period of one year. Currently, a chairman is not permitted to serve more than three consecutive terms in that post. The Minister agreed on Committee Stage to increase the maximum consecutive term for the chairman from three years to four. This will ensure continuity in the board. However, it will also be one of the responsibilities of the nomination committee to ensure board continuity. Seanad amendment No. 124 permits the Central Bank to appoint a director, even where that person may have exceeded the limit. This is the point made by Deputy Pearse Doherty when speaking on the previous group of amendments. The bank can give a credit union the power to appoint someone, even if that person is beyond the term limit.

In the course of the debate on Committee Stage and again in the Seanad a discussion ensued on a waiving of the term limits in exceptional circumstances. The Minister undertook to examine this proposal. The issue to be addressed is whether the term limits could result in a credit union being unable to attract enough suitable directors. The Bill already provides that the Central Bank can require a credit union to nominate additional directors where the board is lacking in skills or expertise. The director so nominated must be approved by the Central Bank. The Bill has been amended in order that the time served as an additional director in these circumstances is not reckoned for the purposes of the term limit. This means a director who has already served his or her 12 years in a15 year period could still be appointed to the board, but only in these exceptional circumstances, if there is a deficiency in expertise and agreed to by the Central Bank. This addresses the concern raised without undermining the core principle of the Bill on term limits.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath This is reasonable. The Minister for Finance, Deputy Michael Noonan, made the point a number of times that he wanted to retain the principle of rotation. He has given some ground on the issue of the term limit moving from nine years to 12.


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