Dáil Éireann debate -
Tuesday, 22 Apr 1997

Vol. 478 No. 1

Written Answers. - Credit Union Legislation.

Dermot Ahern

Question:

216 Mr. D. Ahern asked the Minister for Enterprise and Employment the representations, if any, made by the Irish Bankers Federation in relation to the credit union legislation; and if he will make a statement on the matter. [10508/97]

Minister for Enterprise and Employment (Mr. R. Bruton)

Last January, the Irish Bankers' Federation wrote to the Minister of State with responsibility for commerce, science and technology to indicate that they welcomed the publication of the Credit Union Bill, 1996 and the updating and consolidation of legislation in this area. In an accompanying submission, the federation indicated that they had major concerns about certain aspects of the Bill.

While their submission included some detailed suggestions for amendment of the Bill, it dealt primarily with: the exemption given to credit unions from the Consumer Credit Act, 1995 and its continuance in the Credit Union Bill; the taxation of credit unions, specifically that of corporation tax and the tax treatment of dividends and deposit interest earned by credit union members on their savings; the additional services which credit unions would be enabled to operate upon the Bill's enactment.

At the request of the federation, officials of my Department met federation representatives on 24 February to discuss their submission. Aside from the issue of taxation which was indicated to be a matter for the Department of Finance, the federation were adviced that the Minister would take their comments into account in conjunction with the various other submissions which he had received on the Bill.

The Minister of State, Deputy Rabbitte, met the federation on 10 April last following the conclusion of deliberations by the Select Committee on Enterprise and Economic Strategy on the Bill's detailed provisions. The primary issues raised by the federation with him included: credit union taxation which he indicated was a matter for the Minister for Finance; the savings and loan limits which they argued were not stringent enough. I disagreed; the exemption from the Consumer Credit Act. The federation indicated that they would be asking the European Commission to withdraw the exemption of credit unions from the relevant directive with a view to their being fully regulated by the Director of Consumer Affairs. The Minister indicated that the exemption stood but that the Credit Union Bill does allow the Registrar of Friendly Societies to control credit union advertising; the general regulation of credit unions. The federation argued that this was too lax. The Minister indicated that one of the purposes of the Credit Union Bill was to improve the powers of the Registrar and additional staffing resources had been committed by the Government for that purpose and the role of the Irish League of Credit Unions where the Minister indicated that they were being given a statutory consultative role under the Bill. The Minister has had no contract with the federation on the Bill since that meeting.