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 Header Item Credit Union Bill 2012 (Resumed): Second Stage (Resumed) (Continued)
 Header Item Business of Dáil
 Header Item Topical Issue Matters
 Header Item Credit Union Bill 2012: Second Stage (Resumed)

Wednesday, 14 November 2012

Dáil Éireann Debate
Vol. 782 No. 4

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(Speaker Continuing)

[Deputy Patrick O'Donovan: Information on Patrick O'Donovan Zoom on Patrick O'Donovan] It should not be compared to a banking movement; nor is it fair to use banking terminology when referring to it. The credit union movement is about volunteerism, community, local knowledge and local communities coming together to provide a service that would not be provided otherwise. Credit unions have local knowledge and directors who commit themselves locally.

The credit union movement is trying to promote many innovative ideas, particularly in the area of social financing. One such idea is to work with local authorities, which are currently starved of cash, to carry out simple works in local authority areas. It has been suggested that credit unions could enter into strategic relationships with local authorities and perhaps also with local educational institutions. Credit unions have a social dividend to give to their communities and it is important that they are listened to in that regard.

Having listened to the Minister for Finance opening this debate, it is clear that he is willing to engage with the credit union movement in a constructive way to advance matters. It is important to bear in mind the three pillars of community, volunteerism and local knowledge as this Bill progresses through the House. When the Bill moves into Committee Stage I am sure amendments will be tabled. Many of the amendments proposed by the credit union movement itself are common-sense amendments and I hope they will receive the support of the Government.

I commend my own local voluntary credit union movement in the County Limerick area, which does sterling work. For many families, local credit unions make the difference between access to funds for essential services and the denial of same.

Debate adjourned.

Business of Dáil

Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan I call on the Minister of State, Deputy Paul Kehoe, to move a motion to amend today's Order of Business.

Minister of State at the Department of the Taoiseach (Deputy Paul Kehoe): Information on Paul Kehoe Zoom on Paul Kehoe It is proposed, notwithstanding anything in Standing Orders, that the resumed Second Stage debate on the Credit Union Bill 2012 shall, if not previously concluded, be brought to a conclusion at 3.45 p.m. today.

Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan Is the proposal agreed to? Agreed.

Topical Issue Matters

Acting Chairman (Deputy Bernard J. Durkan): Information on Bernard Durkan Zoom on Bernard Durkan I wish to advise the House of the following matters in respect of which notice has been given under Standing Order 27A and the name of the Member in each case: (1) Deputy Gerald Nash - the need to re-examine the winding down of the charitable lotteries scheme; (2) Deputy Pat Breen - the recent changes in eligibility criteria for participants in community employment schemes, particularly those in the Kilrush and Ballyea areas of County Clare; (3) Deputy John O'Mahony - the procedures used by North East Leader Company, County Mayo, and the effects they have on funding, following the investigation by the Department of the Environment, Community and Local Government; (4) Deputy Tom Fleming - the effect of changes in the management of commonages across the country; (5) Deputy Michael Healy-Rae - the negative impact of the proposed alignment of the 52 local development companies with local authorities; (6) Deputy Paschal Donohoe - the steps that can be taken to ensure that banks pass on the additional mortgage interest relief; (7) Deputy Seamus Healy - the need to approve the cancer drug zytiga for inclusion under the medical card scheme; (8) Deputy Ann Phelan - the establishment of a DNA database in respect of indigenous ash plants; (9) Deputy Simon Harris - the need for the provision of a hospice in County Wicklow; (10) Deputy Robert Troy - the Supreme Court's finding on the recent referendum on the rights of children; (11) Deputy James Bannon - the potential national fallout of the loss of approximately 100 jobs at Ericsson, Athlone, County Westmeath; (12) Deputy Regina Doherty - the need to relax the rule whereby businesses that let premises are liable for the rates arrears of the previous tenants; (13) Deputy Mary Mitchell O'Connor - the need for greater awareness and action to protect victims of violence in the home; (14) Deputy Finian McGrath - the need for a commission of investigation into the murder, in 1985, of Father Niall Molloy; (15) Deputy Mattie McGrath - the situation regarding the referendum on children's rights and the information distributed by the Department of Children and Youth Affairs to the general public; (16) Deputy Aengus Ó Snodaigh - the failure to open the new purpose-built, 70-bed public nursing home in Inchicore, Dublin, and the Minister for Health's plans with regard to same; (17) Deputies Patrick Nulty, Mick Wallace, Clare Daly, Joan Collins, Richard Boyd Barrett, Joe Higgins and Catherine Murphy - the need to legislate for the X case following the death at University College Hospital, Galway, of Ms Savita Halappanavar; (18) Deputy Derek Keating - the need to take action to deal with the increased incidence of tuberculosis in Dublin; (19) Deputy Timmy Dooley - the need to discuss the auditor's report on CIE; (20) Deputy Niall Collins - yesterday's incident in Dalkey, County Dublin, involving a 14-year-old wielding a knife; (21) Deputy Liam Twomey - the need to reduce orthopaedic outpatient waiting times for patients in the south east; (22) Deputy Eamonn Maloney - the criteria set down by the Health Service Executive for entry onto the GMS panel which are contributing to the closure of a health provider in Ballycullen, Dublin 24; (23) Deputy Ciarán Lynch - the need to improve the residential property register by the inclusion of additional relevant, readily available, information; (24) Deputy Kevin Humphreys - the need to co-locate the National Maternity Hospital, Holles Street, with St. Vincent's hospital, on the Elm Park site; (25) Deputy Paul J. Connaughton - the delay in the payment of compensation to victims of floods in 2009; and (26) Deputy Dessie Ellis - the need to address issues with the rent supplement scheme, particularly in view of the report on the matter by Focus Ireland.

The matters raised by Deputies Mary Mitchell O'Connor; Ciarán Lynch; Timmy Dooley; and Patrick Nulty, Mick Wallace, Clare Daly, Joan Collins, Richard Boyd Barrett, Joe Higgins and Catherine Murphy have been selected for discussion.

Credit Union Bill 2012: Second Stage (Resumed)

  Question again proposed: "That the Bill be now read a Second Time."

Deputy Seán Crowe: Information on Seán Crowe Zoom on Seán Crowe Ireland is currently facing one of the worst economic crises in living memory. That crisis was caused by unbridled capitalism, the gross mismanagement of the economy by successive governments and a complete lack of any serious regulation in the banking sector. It is completely understandable that Irish citizens are extremely angry that their taxes have been used to bail out gamblers, speculators and private banks, whose managements are rewarded by obscenely generous salaries and pensions. However, one institution has stood head and shoulders above the rest during these difficult times, namely, the Irish credit union movement. To most people, the credit union is not just a financial institution but a grassroots movement that was built on volunteerism and is at the heart of many communities across Ireland. The 493 credit unions affiliated to the Irish League of Credit Unions across the 32 counties have a total membership of approximately three million. Credit unions affiliated to the league hold almost €11.7 billion in member shares and deposits and have approximately €5.5 billion on loan to members at the moment. Most of us would agree that with its success over the years in serving members' needs and its impressive penetration levels within Irish society, the Irish movement is an international success story in credit union terms.

On a daily basis we are bombarded with stories of former bankers, civil servants and Ministers living a lavish champagne lifestyle, with some collecting pensions of up to €500,000 per year despite their role in creating the social and economic crisis which has shaken Ireland to its core. Credit unions are not perfect and individuals could and did make mistakes. It would be naive to suggest that the movement was unaffected by the boom; we have all heard stories of unsustainable loans being advanced for properties. However, the main point is that the credit unions themselves would be the first to admit that the regulatory context in which they operate is in need of real reform. In fact, the credit union movement has campaigned for years for radical reform of the regulatory structure. The Irish League of Credit Unions was an advocate for the establishment of the Commission on Credit Unions.

Some of the issues addressed by the aforementioned commission are not reflected in the Credit Union Bill, and one such issue is that of shared services. The sharing of services, which was referred to by Members from all sides of the House, offers credit unions the opportunity to benefit from economies of scale and allows them to access expertise that they might not have the resources to engage individually. This may become increasingly important in the future given the increased complexities and running costs which could be expected from a modernised regulatory framework and enhanced service offering. While sharing services is to be encouraged as a mechanism for increasing economies of scale and promoting co-operation between credit unions, it should not expose credit unions to undue risk. The commission recommended that shared service arrangements be established by legislation, and that recommendation must be taken into consideration.

Credit unions should lead the way in assisting the Government in a financial inclusion agenda. The new Bill should clearly enable credit unions to offer electronic payment accounts. I do not know why the Government would be opposed to this development; perhaps the Minister will address that issue in his reply. Credit unions should also aim to provide for the economic and social goals of members and their wider local communities. Credit unions are in an ideal position to play a key role in the provision of social lending and the promotion of financial inclusion. Social lending involves the provision of loans to local enterprises and voluntary organisations to develop social infrastructure in order to provide affordable debt funding for community enterprises that can operate on a self-sustaining, commercial basis to create jobs, promote economic development and otherwise improve social conditions.

Ordinary hard-working people in Ireland are at economic breaking point. Families have lost another generation to emigration, which is at a level we have not seen in decades, and nearly every household is scared stiff of what is coming down the track in the next budget. The social and societal problems that drove the creation of the credit union movement, including high unemployment, poor housing, poor health, emigration and spiralling debt are again firmly embedded in many of our communities. However, credit unions are ready and willing to come to the aid of ordinary people. They can and should be supporting job creation, community-based enterprises and socially useful schemes. In my own constituency of Dublin South West there are areas of high unemployment and social exclusion, but social lending by credit unions could have a strong impact in reducing many of our serious social and economic problems. The Bill should enable credit unions to provide funding to Government-guaranteed schemes and job-generating projects with a social benefit. Why does this legislation not allow credit unions to take part in social lending schemes?

Another issue of concern is the second loan bar, which was referred to by other Members. Reference was made to loans for birthday and Christmas presents, school uniforms, confirmations, communions, graduations and so forth, but people also seek loans to deal with unforeseen difficulties such as ill health. Given the current delays in the processing of student grants, loans from local credit unions can fill a gap. Another common reason for loan applications is for funeral expenses when there is a death in the family. In that context, some flexibility is required regarding second loans.

Why is there is an unacceptable imposition of limited terms for directors of credit unions and a prohibition on their membership of the board? These measures are unnecessary, anti-democratic and an attack on the basis of volunteerism, and they will have a negative impact, particularly on smaller credit unions. Why are we discriminating against credit unions?

  Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.


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