Credit Union Restructuring Board (Dissolution) Bill 2019: Second Stage

I move: "That the Bill be now read a Second Time."

I am pleased to present the Credit Union Restructuring Board (Dissolution) Bill 2019 to the House which gives effect to the dissolution of the Credit Union Restructuring Board. In summary, the Bill provides for the dissolution of the Credit Union Restructuring Board, transfer of certain functions of the Credit Union Restructuring Board to the Minister of Finance and makes the relevant amendments to the Credit Union and Co-operation with Overseas Regulators Act 2012. I will give some background on the establishment of the Credit Union Restructuring Board. The 2011 to 2016 programme for Government set out the Government’s position regarding the credit union sector at that time. It recognised the important role of the sector as a co-operative movement and the distinction between credit unions and other financial institutions.

The Government agreed to establish a Commission on Credit Unions to bring forward recommendations on the future of the sector, recognising that credit unions have played, and can continue to play, an important role in the Irish financial sector. In its March 2012 report, a co-recommendation of the Commission on Credit Unions was that the sector should be restructured on a voluntary, incentivised and time-bound basis. It was further recommended that a new body, the Credit Union Restructuring Board, or ReBo, should be established on a short-term basis. This body was intended to engage with credit unions on the ground and to oversee, facilitate and support the restructuring of credit unions to support their financial stability and long-term sustainability. ReBo was established on an administrative basis in August 2012 and was put on a statutory footing on enactment of section 32 of the Credit Union and Co-operation with Overseas Regulators Act 2012 on 1 January 2013. As recommended by the commission, restructuring was carried out on a voluntary, incentivised and time-bound basis. It was widely flagged to the sector that the Credit Union Restructuring Board was established on a temporary basis and would be wound down when the Minister for Finance was satisfied its work was completed.

Part 3 of the Credit Union and Co-operation with Overseas Regulators Act 2012 provides the legal foundation for the restructuring process, including the establishment of ReBo on a time-bound basis and the dissolution of ReBo on completion of its work under section 43 of the 2012 Act. When the Minister is satisfied ReBo has completed the performance of its functions under Part 3 of the 2012 Act, he can dissolve ReBo. Before dissolving it, however, section 43(2) requires the Minister to conduct a review of the operation of Part 3 of the 2012 Act no later than January 2012. The review is to determine whether ReBo, in the Minister’s opinion, has completed the performance of its functions. On this basis, the Minister carried out two sets of interim reviews. The first was in October 2015 and the second was in October 2016. There was also a final section 43 review in June 2017. Both interim reviews noted ReBo's functions had been fulfilled insofar as they could be, given that at each point in time ReBo’s work was still ongoing. The second interim review, in October 2016, recommended ReBo be given until 31 March 2017 to complete any outstanding restructuring projects. Following that, it was recommended ReBo be wound down in an orderly fashion. The purpose of the final section 43 review in June 2017 was to assess the work of ReBo over its lifetime. That was to determine whether its work was complete as well as to assist the Minister in making an informed decision regarding the restructuring process and on the term of ReBo. The final report clearly demonstrates that ReBo worked methodically and diligently throughout its time-bound lifetime to maximise its potential in facilitating and overseeing restructuring of the credit union sector in Ireland. In addition, ReBo completed its restructuring work with minimal call on Exchequer resources compared to original expectations.

Taking account of each aspect of ReBo's functions, and following due consideration, examination and detailed analysis of its work, the final review in June 2017, under section 43(2)(b) of the 2012 Act, concluded that ReBo had completed the performance of its functions to the highest standards. The orderly wind down of ReBo’s operations was, therefore, recommended. I will briefly outline the extent of ReBo’s work during its short lifetime. After its establishment on a statutory basis under section 42 of the Credit Union and Co-operation with Overseas Regulators Act 2012, ReBo appointed a chief executive officer and relevant staff in the second half of 2013. ReBo staff were employed on fixed-term contracts which expired on or before 31 July 2017. Restructuring under ReBo was a once-off opportunity for credit unions in Ireland to avail of the significant experience of the staff and board of ReBo, led by its chair, Mr. Bobby McVeigh.

ReBo board members included representatives from credit union representative bodies, including the Irish League of Credit Unions, the Credit Union Development Association and the Credit Union Management Association, a Central Bank non-voting member, a Department representative and independent members of the board appointed by the Minister of Finance. When initially established, ReBo engaged extensively with individual credit unions and with the sector as a whole. Such engagement helped raise its profile within the sector and provided a platform for the commencement of its restructuring work in order to carry out its main work in an effective manner. ReBo also put a number of measures in place.

It developed a user-friendly website where credit unions could find information regarding all aspects of the restructuring process. That included a merger process handbook, forms and templates with information on the process itself and updates on completed mergers. In March 2014, ReBo published its strategic plan detailing its overarching vision for vibrant, sustainable credit unions which are credible and trustworthy providers of financial services to their members. It also published its mission statement reaffirming that ReBo shall facilitate and oversee the restructuring of our credit unions on a voluntary, incentivised and time-bound basis to support the financial stability and long-term sustainability of credit unions generally.

Debate adjourned.