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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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(Speaker Continuing)

[Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath] Who knows where any of us will be in January 2025? There will be a number of Governments between now and then and this issue can be kept under review. I am satisfied with the amendments and thank the Government therefor.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett That is a sobering thought. Where will we be in 2025?

Deputy Brian Hayes: Information on Brian Hayes Zoom on Brian Hayes On the board of a credit union.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett This is a considerable improvement in recognition of the concern raised by the credit unions.

Given the Minister of State has provided for exceptional circumstances, I hope that, if everybody is being reasonable, the concerns expressed by the credit unions will be addressed adequately. However, I never really received a satisfactory answer to one question, bearing in mind the importance ascribed to the principle of rotation and the imposition of term limits. If term limits are considered so important for credit unions, why are they not imposed on banks, for example? Why does the Government attach so much importance to term lmits for credit union directors? Why do we not have a problem in this regard and with certain other conditions that applied to staff who served in our banks over the years? Will the Minister of State explain this?

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty I do not support term limits. The credit union movement is a democratic movement. In the same way that this institution, a democratic one, does not have term limits, credit unions should not have any either. The issue is dealt with and we lost the debate but I welcome the fact that the Minister of State has extended the term limits. I welcome the exclusion, waiver or whatever the Minister of State wants to call it that I suggested on Committee Stage and furnished on Report Stage. It is basically encompassed in amendment No. 124, which deals with the term limits. The provision is not as strong as I would have liked. It refers to an additional director. I am not sure about this because I obviously have not been on the board of directors of a credit union.

Consider the circumstances if we add up the exclusions that exist in terms of voluntary assistance, employees of other credit unions and account for the real and necessary requirements we place on directors of credit unions to be fit for purpose and have knowledge and experience. In a small credit union, one could limit the pool; therefore, this is a question of additional directors and not about circumstances where a credit union cannot fill its complement. Scope is provided to allow that to happen. I hope the procedure will not be cumbersome. Under section 90, the review must be carried out by the Central Bank. One must go to the credit union nomination committee to suggest a director one feels would be fit for purpose. The bank must agree that and then the director is appointed for the period up to the next AGM. After an AGM, the procedure could take nine months, after which the director may only be in office for three months before leaving. The provision is really to ensure that the board does not lose experience and will have the necessary experience to carry out its functions properly. I am a little bit concerned but perhaps my concern is ill founded. The Central Bank will obviously have to work out the procedure. I want to ensure the process is not cumbersome.

The legislation does address my concerns in regard to the points on directors. We could have given full discretion to the Central Bank in respect of a voluntary member of staff or a member of staff from another credit union. I can understand the conflict that the Minister of State talked about in regard to a staff member of one credit union being a director of another, and the need for one to be fully aware of the books and all the various projects. If the section encompassed this, it would be up to the Central Bank to determine whether the employee of a given credit union would have a conflict of interest if he or she were a director of another. The amendment would be very safe. We cannot do anything about this at this stage but we could and should have examined it. Perhaps we will do so.

Deputy Brian Hayes: Information on Brian Hayes Zoom on Brian Hayes We all share the common goal of ensuring that credit unions have the requisite number of staff with suitable qualifications and skills required to do the job they are being asked to do. Deputy Doherty made a fair point in asking whether we are now accepting a pretty cumbersome set of circumstances whereby, if a credit union found it did not have the correct range of skills required on its board, it would make an application to the Central Bank, which would decide on the position, after which a name would come forward that the bank would have to sanction. If this applies, it is because the credit union makes the application to the Central Bank on the basis that it feels it does not have the requisite number of people to serve the purpose in question because of a lack of skills or expertise. This gives the credit union the power to make the first move. However, Deputy Doherty's point is important in that it is a question of what happens next. This issue is one that the Central Bank needs to be mindful of in circumstances where it is trying to expedite an application on behalf of the credit union. Certainly, any help that the Department of Finance can bring to bear on the bank to speed up the process and putting in place a code of practice in this regard would make sense.

On the remarks made by Deputy Boyd Barrett, there have been many investigations into banking but we have not had a commission yet. What we have attempted to do is put the legislative requirements in place to deal with the issues concerning credit unions. Without wishing to reopen cans of worms, I am pretty happy that the Government has addressed virtually all the issues concerning the directors who were in place in the various credit institutions, whether we own them or not, and that the institutions have a new governance system in place with new staff who will, I hope, recover the banks on behalf of us all.

  Seanad amendment agreed to.

Seanad amendment No. 40:
Section 15: In page 21, line 7, to delete "(15) For directors of" and substitute "(13) For directors of".

  Seanad amendment agreed to.

Seanad amendment No. 41:
Section 15: In page 21, line 10, to delete "9 year" and substitute "12 year".

  Seanad amendment agreed to.

Seanad amendment No. 42:
Section 15: In page 21, line 11, to delete "subsection (14)" and substitute "subsection (12)".

  Seanad amendment agreed to.

Seanad amendment No. 43:
Section 15: In page 21, line 13, to delete "(16) Directors of a" and substitute "(14) Directors of a".

  Seanad amendment agreed to.

Seanad amendment No. 44:
Section 15: In page 21, line 18, to delete "(17) Subject to the" and substitute "(15) Subject to the".

  Seanad amendment agreed to.

Seanad amendment No. 45:
Section 15: In page 21, line 23, to delete "(18) A director appointed" and substitute "(16) A director appointed".

  Seanad amendment agreed to.

Seanad amendment No. 46:
Section 15: In page 21, line 23, to delete "subsection (17)" and substitute "subsection (15)".

  Seanad amendment agreed to.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt Seanad amendments Nos. 47 and 49 are related and may be discussed together.

Seanad amendment No. 47:
Section 15: In page 21, to delete lines 28 to 31 and substitute the following:
"(17) Where all the directors of a credit union intend to resign on the same date, the secretary shall give written notice of the directors’ intention to the Bank and the board oversight committee."

Deputy Brian Hayes: Information on Brian Hayes Zoom on Brian Hayes A further minor technical amendment was made on Committee Stage in the Seanad to clarify that the secretary must inform the Central Bank that all directors intend to resign on the same day. Amendment No. 49 was made on Committee Stage in the Seanad to remove unnecessary wording in section 16. The secretary is a board member and, as such, is entitled to attend board meetings.

  Seanad amendment agreed to.

Seanad amendment No. 48:
Section 15: In page 21, subsection (2), lines 33 and 34, to delete all words from and including "to" where it secondly occurs in line 33 down to and including "to" where it secondly occurs in line 33 down to and including "subsection (1)" in line 34 and substitute the following:
"to a reduction in the number of board of directors in compliance with that Act".

  Seanad amendment agreed to.

Seanad amendment No. 49:
Section 16: In page 22, lines 1 and 2, to delete "shall be entitled to attend and".

  Seanad amendment agreed to.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt Seanad amendments Nos. 50, 56 to 60, inclusive, 62, 63, 67 to 72, inclusive, 84, 86, 88 and 89 are related and may be discussed together.

Seanad amendment No. 50:
Section 17: In page 23, line 26, after "manager" to insert ", risk management officer and compliance officer".

Deputy Brian Hayes: Information on Brian Hayes Zoom on Brian Hayes Amendment No. 50 was made to include the appointment of the risk management officer and compliance officer as one of the functions of the board.


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