Credit Union Bill 2012: Committee Stage

SECTION 1

Amendments Nos. 1, 164 to 166, inclusive, and 176 to 180, inclusive, are related and may be discussed together, by agreement. Is that agreed? Agreed.

Government amendment No. 1:
In page 5, subsection (1), line 28, after “Union” to insert “and Co-operation with Overseas Regulators”.

These amendments and the related Schedules are to provide for measures which will allow the Central Bank of Ireland greater capacity to co-operate with its counterparts in other countries. Specifically, these amendments must be enacted to permit the Central Bank to sign the International Organization of Securities Commissions multilateral memorandum of understanding, or MMOU. This must be done by year end. In light of the pressing end-of-year timeline for signing the MMOU, it has been necessary to effectively make these amendments part of this Bill. The purpose of the MMOU is to allow the Central Bank to co-operate and share information with other regulators, including other securities commissions, around the world in accordance with international best practice.

The provisions being inserted into the Bill are currently part of the Central Bank (Supervision and Enforcement) Bill 2011, which is due to go to Committee Stage in the Dáil in January. The changes envisaged include: enacting section 53 of the Central Bank (Supervision and Enforcement) Bill, so that the Central Bank may use its powers on behalf of overseas regulators; enhancing and consolidating authorised officer provisions; and related provisions for guarding the Central Bank confidentiality regime.

Given that these amendments are not related to credit unions, it is necessary to amend the Short and Long Titles of this Bill to accommodate them. I wish to emphasise that the expeditious passage of the Credit Union Bill through this House is to allow for €250 million to be contributed to the credit union fund by year end, as there is no scope in the 2013 figures for it to be done after that. This money is essential for the restructuring process to get under way. We have already discussed this matter on Second Stage.

While the International Organization of Securities Commissions, IOSCO, requirements are urgent, they are not the cause of the accelerated timetable for the Bill. I acknowledge that on Second Stage, Members asked what was the rush and the rush is to get the money in place, because the Government has made provision for it in 2012. The end of 2012 is approaching and it is important that the money be put in place as part of the restructuring process. In respect of this group of amendments, the Government simply is bringing them forward in order that this important aspect of the Central Bank's work also can be part and parcel of the Bill.

Amendment agreed to.

Amendments Nos. 2, 3 and 159 are related and may be discussed together.

Government amendment No. 2:
In page 5, subsection (2), line 30, to delete “sections 37 and 48(2)” and substitute the following:
“sections 36, 37, 48(2) and 57(2), Part 5 and Schedules 2 to 5”.

I will speak on amendments Nos. 2, 3 and 159. Given these provisions amend the Central Bank Reform Act 2010, it is also necessary to update the citation of the Central Bank Acts and these amendments provide for this update. I might put some additional information on the record of the House in case there is any question about this. The first of these changes, as set out in amendments Nos. 1 and 180, will amend the Short and Long Titles of this Bill to provide for the inclusion of this package of measures and hence the new Title to the Bill, namely, the Credit Union and Co-operation with Overseas Regulators Bill. The net impact is the name of the Bill is being changed from being the Credit Union Bill to the Credit Union and Co-operation with Overseas Regulators Bill 2012, which I readily concede is a bit of a mouthful.

The Long Title is likewise amended to specify that the Central Bank will have revised powers in respect of co-operation with other regulators and will from henceforth have consolidated powers in respect of the appointment of authorised officers. The International Organization of Securities Commissions, usually referred to as IOSCO, co-ordinates security regulators across the globe. The great majority of IOSCO members already have acceded to the memorandum but amendments are required to enable the Central Bank of Ireland to sign it. In these amendments, the Government is simply allowing the Central Bank to sign this international amendment in order that the powers that can be given to it are clear for all to see.

The Central Bank (Supervision and Enforcement) Bill 2011 proposes measures which meet all of these requirements and it was intended that the Central Bank of Ireland would be in a position to accede to the memorandum on the enactment of that Bill. However, IOSCO members have agreed that it would issue a watch-list of those countries which had not yet signed the memorandum on 1 January 2013. This change means that the enactment of the relevant legislation provisions now is a matter of some urgency.

As for what the amendments do, the new section 54 of the Central Bank Reform Act is a general provision enabling the Central Bank to exercise its various powers in support of third-country regulators. It is important to note that the proposed power enables the Central Bank to share information with other regulators. In making a decision to share information with other regulators, the Central Bank may take into account a number of factors, including whether the breach of law concerned also would be a breach of Irish law, as well as the seriousness of the issue and the public interest in general. It also should be noted that the Central Bank can expect a financial contribution to defray the cost of the investigation by the bank, if it agrees to a request to investigate a matter on behalf of another regulator, unless European Union-related obligations are concerned.

Amendment No. 164 provides for changes to section 33AK of the Central Bank Act 1942. It removes the obligation on the bank to report information pointing to the commission of an offence to other law enforcement authorities in the State where the information concerned is received from an overseas supervisor. The reason for this is to allow the free flow of information between regulators without fear that the information shared could cause criminal prosecutions to fail as a result of the variations in the methods used to gather information in different jurisdictions. The mandatory passing of information to those charged with prosecuting criminal offences in circumstances in which Irish rules of evidence might mean that any prosecution would be contaminated, clearly is not in the interest of justice for the individual or the integrity of the criminal justice system generally.

The larger part of amendment No. 165 proposes to repeal the existing authorised officer powers under 20 different Acts and statutory instruments and replace them with a single authorised officer regime which the Central Bank may use to obtain information from all regulated financial service providers. The current authorised officer regime varies across each sector, and important powers provided for in some circumstances are absent in others. A key provision will allow for an authorised officer appointed by the Central Bank to require any person who might reasonably have information relevant to the investigation of a financial service issue to provide the information. The substance of the amendments in group 2 is to provide for that and to tidy up the existing legislation by way of a number of consequential changes.

Amendment agreed to.
Government amendment No. 3:
In page 5, between lines 31 and 32, to insert the following subsection:
“(3) The Central Bank Acts 1942 to 2011, sections 36, 37, 48(2) and 57(2), Part 5 (in so far as it amends any of those Acts), and Schedules 2 and 3 (in so far as they amend any of those Acts) may be cited together as the Central Bank Acts 1942 to 2012.”.
Amendment agreed to.
Section 1, as amended, agreed to.
Sections 2 and 3 agreed to.
SECTION 4

Amendments Nos. 4 and 52 are related and may be discussed together.

Government amendment No. 4:
In page 6, between lines 10 and 11, to insert the following subsections:
“(2) Notwithstanding anything in the rules of a credit union, the board of directors may, by resolution passed during the transitional period, make such amendments of the rules of the credit union as may be consequential on the provisions of this Act.
(3) For the purposes of subsection (2), the transitional period is the period of one year from the commencement of this section.
(4) Notwithstanding anything in section 14(4) of the Principal Act, after the expiry of one year from the commencement of this section, the Bank shall not be required to register any amendment of a credit union’s rules unless such consequential amendments of the registered rules as are mentioned in subsection (2) either—
(a) have been made before the Bank receives the amendment; or
(b) are to be effected by the amendment.”.

We are dealing with amendments Nos. 4 and 52. These amendments mirror sections 14(6) to 14(8) of the Credit Union Act 1997 and provide for changes to the rules of credit unions that are consequential to the provisions of the Bill. Amendment No. 4 clarifies that during the first year following the commencement of this section, the rules of the credit union may be amended by a resolution of the board of directors rather than by the members of the credit union where such changes are necessary to comply with the provisions of the Bill.

Amendment No. 52 provides for a reduction in the number of board members from 15 to 11 by amendment to the rules of the credit union. This is a saving provision which continues to enforce any regulatory action taken by the Central Bank on or before the commencement of this Act under a provision which is being amended, repealed or revoked by this Act. This section also sets out a definition of regulatory actions for the purpose of this section.

Amendment agreed to.
Section 4, as amended, agreed to.
Section 5 agreed to.
SECTION 6
Government amendment No. 5:
In page 7, line 31, after “legislation’ ” to insert the following:
“, where applicable to credit unions acting under any authorisation from the Bank provided for by law,”.

During Report Stage in Dáil Éireann and Second Stage in this House I indicated that I would table an amendment to clarify that it is only legislation that already applies to credit unions that would be covered by this definition. The amendment outlined provides the clarification sought. The point was raised by Senator Byrne and a number of other Senators on Second Stage in the House.

The amendment provides that the financial services legislation definition only relates to provisions applicable to credit unions acting under any authorisation from the Central Bank as provided for by law. Such authorisation may include acting as an investment intermediary under the Investment Intermediaries Act 1995. The amendment clarifies any misunderstanding that the definition somehow applies - inappropriately - a corpus of so-called banking legislation to credit unions. I again clarify to the House that this definition does not apply financial service provisions to credit unions anew, nor could it be used for that purpose. The perception, that the definition turns on to credit unions a range of new legislative provisions from the wider financial services area, is mistaken.

The point was made that we would table an amendment that would be clearer in terms of what credit unions can and cannot do. A number of Members indicated that credit unions frequently do other things, in particular in terms of intermediaries legislation, which is not clarified in other legislation in terms of a definition. We were asked by colleagues in the Dáil and in this House to bring forward a clearer definition of what exactly applies to credit unions under the section.

The amendment provides a better definition and greater clarity in that regard.

Amendment agreed to.
Government amendment No. 6:
In page 8, lines 23 and 24, to delete all words from and including “or” in line 23 down to and including “secretary,” in line 24 and substitute the following:
“, the secretary or any other member of the board of directors,”.

This amendment clarifies that the secretary is a member of the board, unlike, for example, the position of a company secretary. We were asked to make the position clear in the Bill and are pleased to do so.

Amendment agreed to.
Section 6, as amended, agreed to.
NEW SECTIONS

I move amendment No. 7:

In page 9, before section 7, to insert the following new section:

“7.—The Principal Act is amended by the insertion of the following new subsection after section 6(5):

“(6) Nothing in the foregoing will prevent a credit union from providing certain services, to be prescribed by the Bank, to a credit union or a member of another credit union registered under this Act.”.”.

I welcome the Minister of State. Our interaction with him and his responses to questions have been positive and I hope the debate will continue in a positive vein today. While progress has been made on the Bill, we are still slightly short of the line.

The amendment has been moved because insufficient movement has been made on the issue of shared services. Amendments Nos. 7 and 8 would allow for member level service sharing among credit unions. This is technologically feasible and there is no reason the sharing of services should not be permitted in the Bill.

On Second Stage, the Minister of State referred to a report on shared branches, which is expected to be released in mid-2013, and indicated the Bill could not provide for shared services. He also noted that the issue of services had not been addressed in the report of the Commission on Credit Unions. That the commission engaged in significant discussion of member level shared services is reflected on pages 87 to 89, inclusive, of its final report.

Amendment No. 7 makes clear that any shared services would only commence with the explicit agreement of the Central Bank and where the credit unions in question have demonstrated a capacity to deliver such services. We have made obtaining the approval of the Central Bank a precondition for commencing shared services because a number of technical issues must first be addressed. The amendment does not propose to allow shared branching. It would, however, allow credit unions to avail of a shared services facility at member level and I urge the Minister of State to accept it.

Before commenting, I ask the Minister of State to respond to the points made by Senator Reilly.

Amendment No. 7 relates to shared branching, which involves credit unions providing front-of-house services to each others' members. Shared branching is an activity that operates primarily in the credit union system of the United States. It was not considered by the Commission on Credit Unions and does not form part of the commission's final report. Moreover, in the public consultation process shared branching was not a key issue in the submissions received from credit unions or other stakeholders, nor did it emerge from the survey returns from the credit unions.

In simple terms, shared branching would allow one credit union member to use the service of another credit union. For this facility to work securely, it is important that certain procedures are put in place beforehand. First, a settlement system is needed as a person could withdraw his or her savings several times from different credit unions if safeguards were not in place to prevent such a practice. Second, an underwriting process is needed to establish proper assessment of ability to repay at the credit union issuing the loan on behalf of the member's home credit union. It would also need to be made clear who would be held responsible should a loan go into arrears. Would it be the member's credit union or the credit union which issued the loan? Third, an accompanying prudential framework would be needed to ensure, for example, that proper liquidity management practices are in place to guard against large, unpredictable withdrawals at small credit unions which are connected to larger credit unions. Furthermore, shared branching raises fundamental questions about the common bond, notwithstanding the commission's recommendations that the common bond remain unchanged.

The fact that shared branching apparently operates successfully in other jurisdiction indicates that it is certainly worth considering. I consider that it would be premature to enshrine shared branching in legislation in the absence of the supporting infrastructure and prudential framework developed in consultation with all the relevant credit union stakeholders and the Central Bank. The Minister has written to the Credit Union Advisory Committee to ask it to examine this issue and to report back to him by the end of the second quarter of next year. I think I also mentioned this on Second Stage. The committee's report will involve an assessment of the current appetite for shared branching among credit unions and their members, an analysis of the framework requirements to support shared branching, an exploration of various alternatives and approaches drawing on international experience and best practice, and the recommendations of the Credit Union Advisory Committee, including any legislative changes required. The report is to be an open process involving consultation with other credit union stakeholders, including credit union representatives and the Central Bank. We do not propose to accept amendment No. 7, which has also been our position in the other House, but the Minister has asked for this report to be laid before him by the second quarter of next year. If there is an appetite for a wider application of this model, which I know is used in other jurisdictions, we can consider it in due course, but it is not appropriate to do so in the context of the current legislation.

I do not think credit unions want to be a single bank or branches. This is why I referred to shared services. I know the services detailed in amendment No. 7 cannot be introduced overnight. There are issues with risk management, which the Minister of State mentioned, but it should not preclude the Bill detailing what such services could include. This is why the amendment sets out the difference between branching and shared services because there are many positives that can come out of this and because it would allow credit unions to be as efficient and responsive as possible. This is why I will be pressing amendment No. 7.

On Second Stage I argued that it is important that credit unions move into the electronic age, which is, effectively, the concern of Senator Reilly's amendment. I heard what the Minister of State said but perhaps there should be some flexibility for credit unions. For somebody not to have the ability to remove cash from his or her credit union account through another credit union ATM seems akin to when one could only remove cash from a bank with a particular card. There is a lack of flexibility. Looking at some of the other services that have been discussed and the organisation of services, it is eminently sensible for it to happen with respect to research and marketing services. Could some of those be considered and could the Minister of State have a look at that?

I support this amendment, which is very similar to one we produced but which has not been tabled for discussion for technical reasons. However, I intend to table it on Report Stage. I agree with Senators D'Arcy and Reilly that more flexibility is required, especially when we look at the consolidation of the banking network. I am not saying the credit unions are not in the electronic age but we want to allow developments like electronically enabled payment accounts. It was the understanding of the credit union movement that this was agreed by the commission, but it seems to have been omitted from the Bill. While I accept a large part of the Minister of State's response, there are other issues to get over.

It is not sufficient to state that there will be a further report by the second quarter of next year. There is nothing to preclude this from being part of the Act. The Minister of State need not initiate that part but it can be laid down in law.

My colleagues have covered why this is important. We are facing a degree of consolidation within the credit union sector in any case, so credit union customers will require access to accounts, ease of payment and so forth. It is for the future viability of credit unions, when one considers the additional services that are also being offered by the post office network, which is a good thing. We support this amendment and I intend to table a similar amendment on Report Stage if the Minister of State does not accept it.

We support the general thrust of the amendment but it is probably a little premature in light of what the Minister of State said about the lack of a set up and system. As the amendment appears to mix up the concepts of shared branching and shared services, we cannot support it.

I will clarify this because we appear to be mixing up two things. Shared branching is an internationally recognised term for the way in which credit unions can operate in a joined-up system of prudential risk whereby money can be taken out of one credit union applicable to another or loans can be taken out of one credit union applicable to another. That was not a recommendation from the commission. It recommended an aggressive form of shared services, which is already provided for in the Bill. The Senators are confusing one with the other.

If there is an appetite for shared branching, which is the essence of the co-operative banking system in America and other countries, the Minister, Deputy Noonan, is open to that. However, we must tease out the potential prudential risks and the implications for big and small credit unions and for deposit ratios, which are very clear in terms of what the Central Bank can issue to credit unions.

Senator Reilly spoke about shared services. There is nothing in the Bill to prevent that from happening. However, to take the next step and decide to integrate the entire credit union movement in a way that has hitherto not come before us in legislation or by way of a specific recommendation of the commission is one we cannot take. We are open to examining this and I am not closing down debate on it. The view of the Minister for Finance is that in asking that this matter be brought before him by the end of the first half of next year he demonstrates his intent to both Houses of the Oireachtas to look at this in a constructive way, if there is support for it. However, we need to hear from the credit union and hitherto that has not been its position.

We are confusing both matters. The Government is at one with Senator Reilly with regard to what she wants to do here, but there is nothing in the existing legislation that prevents us from doing what she wants us to do. However, I believe she is mixing this up with shared branching, which is a step too far at this stage. We are open to it if there is support for it in the future.

Amendment put and declared lost.

I move amendment No. 8:

In page 9, before section 7, to insert the following new section:

“7.—The Principal Act is amended by the insertion of the following new section after section 26:

“26A.—(1) A credit union may, once the approval of the Bank has been secured and the necessary capacity and infrastructure put in place, promote, invest in, loan to, and/or contract with a credit union service organisation approved by the Bank (on such terms as the bank considers appropriate) and engaged in activities and services of the credit union service organisation related to the routine daily operations of credit unions.

(2) Nothing in this section or the following provisions of this Part affects the operation of any enactment which is not contained in this Act and which, in whole or in part, relates to the provision of credit union service organisation activities or services.

(3) Credit union services organisation activities or services may include but are not limited to the following:

(a) clerical, professional and management services:

(i) accounting services;

(ii) internal audits for credit unions;

(iii) credit union risk and compliance;

(iv) management and personnel training and support;

(v) marketing services;

(vi) research services;

(vii) procurement related services;

(viii) debt collection services;

(b) electronic transaction services:

(i) automated teller machine (ATM) services;

(ii) debit card services;

(iii) electronic fund transfer (EFT) services.”.”.

This amendment follows on from amendment No. 7 and details the type of shared services that could be made available to members when the required capacity and support of the Central Bank has been secured. The Commission on Credit Unions in its report clearly supported a new regime for the provision of additional services. It is clear from that section of the report that the meaning includes both member level and back end shared services. I will not labour the point we have discussed, but these are some of the services we envisage being shared. I ask the Minister of State to accept the amendment to facilitate the empowerment of credit unions to meet their members' demands.

Amendment No. 8 is consequential on amendment No. 7.

Were we to accept amendment No. 7, we would accept amendment No. 8. Were we to reject amendment No. 7, we would automatically reject amendment No. 8.

The list of services provided by Senator Reilly is thorough but probably not exhaustive. To include so specific a list in legislation at this stage would be against the thrust of the Bill, as it could preclude elements that have not been mentioned.

It would not preclude other additional services. If Senator Gilroy read the amendment, he would see that it states, "but are not limited to the following".

In which case, why include it?

It would not limit the list to these services. I wish to give notice that we will table this amendment again on Report Stage. It was not included for technical reasons, but I intend to submit a similar amendment on Report Stage.

I thank Senator Reilly for amendment No. 8. The commission report notes that services may be shared in a number of ways, including the establishment of central credit unions, corporate credit unions, credit union service organisations - CUSOs, but we will just call them "credit union service organisations" - or local alliances. Shared service arrangements are already in operation in the credit union sector, for example, the Credit Union Services Co-operative Limited or the Irish League of Credit Unions, ILCU's own payment services. The commission recommends that the establishment of such shared service arrangements should be facilitated by legislation, where necessary.

The Government agrees that the sharing of services offers credit unions an opportunity to benefit from economies of scale and allows them to access expertise that they would not normally have the resources to engage. The latter may become increasingly important, given the increasing complexity and running costs expected in a modernised regulatory framework and enhanced service offering. The ILCU has accepted that there is no obstacle to establishing shared service arrangements at credit union level.

Subsection (3)(a) of Senator Reilly's amendment No. 8 states:

(a) clerical, professional and management services:

(i) accounting services;

(ii) internal audits for credit unions;

It also refers to marketing and research services. I am reliably informed that it is totally possible and legal to bring these services together in a shared way, as is the case in the examples I have cited. As the provision is already in place, there is no need to specify it in the legislation.

We encourage credit unions to use the shared service model. The Government is using it to save significant resources. I see Senator Barrett in the Chamber. In terms of HR, he will be glad to hear that we will save 26% next year by sharing HR services in central government. If we can do it centrally, there is no reason that groups of credit unions cannot do it locally. There is no need to put it in law, as it is already allowed.

Amendment put and declared lost.
SECTION 7

Amendments Nos. 9, 12, 19, 29 and 34 are related and may be discussed together. Is that agreed? Agreed.

Government amendment No. 9:
In page 9, line 37, to delete "appropriate and".

These are minor technical amendments that insert a test of certainty. Where the bank makes regulations under this section, the bank may only do what is necessary in the circumstances.

Amendment agreed to.

Amendments Nos. 10, 11 and 13 to 16, inclusive, are related and may be discussed together. Is that agreed? Agreed.

Government amendment No. 10:
In page 9, between lines 40 and 41, to insert the following:
"(2) The conditions imposed by the Bank under subsection (1) may include requiring a credit union--
(a) to notify the Bank of any events of such significance that could materially affect the credit union including any change to the strategic plan of the credit union;
(b) to operate a more limited business model agreed with the Bank;
(c) to cause to be undertaken an independent review of the credit union's business within 12 months in order to ensure that the credit union is complying with all legal and regulatory requirements.".

Amendment No. 10 inserts a new provision into section 7 to identify some of the types of conditions that the bank may impose on the registration of credit unions under subsection (1).

These include a condition that the credit union must notify the bank of significant events. There is also a condition to operate a more limited business as agreed with the bank and a condition to undertake a review of the credit union's business within 12 months of registration to ensure it is compliant with all requirements. Conditions such as these must be necessary to protect the savings of credit union members. Conditions may need to be imposed in the formative years of a new credit union, as the union may be required to build up the requirement risk management and compliance controls within the credit union. This amendment also provides that only these conditions that are necessary may be imposed as a condition of registration. Any condition imposed may be applicable by the credit union to the Irish Financial Services Appeals Tribunal. These conditions may only be imposed on new registrations, and there have been very few of these in recent years. Amendments Nos. 11 and 13 to 16, inclusive, are all consequential on amendment No. 10.

The Minister of State mentioned new registrations. The Minister of State related a number of requirements when operating a more limited business model but if the Bill is passed, could the Central Bank move with these powers on an existing credit union? Does it only apply to new registrations?

It only applies to newly formed credit unions and as I understand it, there is no application to existing credit unions. It is another layer of security where a new credit union is formed. We have not seen many of these in recent years but that is not to say that in future, this will remain the case. The proposal would only apply to new credit unions.

Amendment agreed to.
Government amendment No. 11:
In page 9, line 41, to delete "(2) Any of the" and substitute "(3) Any of the".
Amendment agreed to.
Government amendment No. 12:
In page 9, line 43, to delete "appropriate and".
Amendment agreed to.
Government amendment No. 13:
In page 10, line 3, to delete "(3) Whenever the Bank" and substitute "(4) Whenever the Bank".
Amendment agreed to.
Government amendment No. 14:
In page 10, line 26, to delete "(4) Before deciding to" and substitute "(5) Before deciding to".
Amendment agreed to.
Government amendment No. 15:
In page 10, line 29, to delete "subsection (3)(b)" and substitute "subsection (4)(b)".
Amendment agreed to.
Government amendment No. 16:
In page 10, line 43, to delete "and (2)" and substitute "to (3)".
Amendment agreed to.
Section 7, as amended, agreed to.
SECTION 8

Amendment No. 17 will be discussed with amendments Nos 23, 26 and 28, which are related, by agreement. Is that agreed? Agreed.

Government amendment No. 17:
In page 11, line 9, to delete "The Bank may" and substitute the following:
"For the adequate protection of the savings of members of credit unions the Bank may".
Deputy Brian Hayes: These amendments set out the principles of this regulation-making power by clarifying that the Central Bank may only make regulations in respect of these sections where they are necessary to protect members' savings. Amendments Nos. 26 and 28 provide that the bank may only make regulations that are necessary in respect of credit union lending practices, reporting loans to the credit union and the holding of provisions for loans or categories of loans.
Amendment agreed to.

Amendment No. 18 will be discussed with amendments Nos. 24, 25 and 27, which are related, by agreement. Is that agreed? Agreed.

Government amendment No. 18:
In page 11, line 11, after "savings" to insert the following:
"(expressed as a monetary amount or as a percentage of some monetary amount or determinable monetary amount)".

These are minor technical amendments which allow regulations to set limits in the form of a monetary amount as well as a percentage. In the context of these minor amendments, the section gives effect to recommendation 10.3.27 of the Report of the Commission on Credit Unions. It repeals section 27 of the principal Act and replaces it with a provision allowing credit unions to raise funds by issuing shares to members or by accepting deposits.

The bank may make regulations in relation to savings limits and the amount of savings, or category of savings, a member can hold, the ratio of deposits to shares that credit unions may hold and any other requirements or limits the bank considers appropriate.

What is the ratio and what are the alterations or changes?

Deposits are limited to €100,000 per saver and savings are limited to a total of €200,000 between shares and deposits or 1% of the total assets of the credit union, whichever is the greater. The deposit guarantee scheme does not apply to credit unions. Members' savings up to €100,000 are protected under this scheme.

Amendment agreed to.
Government amendment No. 19:
In page 11, line 17, to delete “appropriate” and substitute “necessary”.

May I use this opportunity to seek clarification? The Minister of State answered Senator D'Arcy on amendment No. 18, but amendment No. 19 is related to it.

I do not want to delay the debate, but I would like more detail of the savings and share limits the Minister of State mentioned. He said he was replacing an existing subsection with a provision to allow the Central Bank to further restrict any credit union, because there are already restrictions, in relation to the number of deposits and shares held by a member. What is the difference between what is proposed and what is in existence?

My understanding is that they will be set out in regulations. They do not apply to individual credit unions but to classes of savers within credit unions. They will be set out in regulations.

Have those regulations already been prepared?

It is also my understanding that consultation is taking place. There is provision for that consultation and it will be set out in due course.

I do not wish to labour the point, but I find it strange that we are looking to amend the section by putting in new limits that will be set in additional regulations that do not form part of the Bill. We are being asked to vote-----

The measures are in existing legislation.

That is what I want to get to. Am I being asked to agree to something although I do not know what it is going to be?

My understanding is that the 1997 Act has all the details in the primary legislation. If one were to do it one would not do it in this way. It is normal to set it out by way of regulation.

Are we proposing any major changes to that?

Not as it stands, no.

The primary legislation will stand.

Is the amendment agreed to?

Could we have more clarification on this amendment? Senator Darragh O'Brien makes a fair point.

I have put the amendment, Senator Gilroy, and the Minister of State has clarified it. Senator Darragh O'Brien will have a chance to discuss this issue further on Report Stage.

We will come back to this on Report Stage, when we may get further clarification. I will not oppose the amendment at this stage.

I can put the clarification note on the record, if the Senator would like that.

If the Minister of State does not mind.

This clarification refers to savings in amendment No. 18.

The Irish League of Credit Unions raised an issue in relation to alternative forms of funding, for example deferred shares. These types of shares are different from other credit union shares in being transferable but not withdrawable and carrying no right to borrow. These are generally repayable only on winding-up or dissolution of a credit union after all creditors have been repaid. These have recently been introduced for the credit union sector in the United Kingdom. However, alternative forms of funding such as deferred shares were not recommended by the commission in its report. This did not emerge as an issue for credit unions during consultation with the credit union sector nor in the survey of credit unions undertaken by the commission.

The Minister is open to further discussions of ideas and consultation about alternative forms of funding. However, the matter is not one to be included in the current Bill.

Amendment agreed to.
Section 8, as amended, agreed to.
SECTION 9

Amendments Nos. 20, 21 and 121 to 123, inclusive, are related and will be discussed together.

Government amendment No. 20:
In page 11, line 26, to delete " "27A.—In addition to" and substitute " "27A.—(1) In addition to".

Amendments Nos. 20 and 21 involve a redraft of the Bill as published. Following further consideration, it was felt that the provisions in section 29, which proposed to insert a new section 84A in the 1997 Act would be more suitable under section 9. The section deals with the policies, procedures and practices that a credit union must have in place to ensure it is in compliance with the requirements imposed on it. For example, the Central Bank may make regulations imposing liquidity requirements on credit unions under section 30. Currently, credit unions have a minimum liquidity requirement of 20%. The amendment allows the Central Bank to make regulations prescribing the operational practices, policies, procedures, etc., to be adopted by credit unions more generally. These may include requiring them to adopt monitoring procedures to ensure the 20% liquidity requirement is complied with. Regulations may also require them to ensure people involved in monitoring liquidity have an understanding of the calculation of liquidity and maturity mismatches. These requirements may also deal with reporting requirements, including arrangements for reporting breaches to the board of directors of the Central Bank.

Section 9, as amended, agreed to.

Amendment agreed to.
Government amendment No. 21:
In page 11, line 33, to delete "legislation.2." and substitute the following:
"legislation.
(2) Without prejudice to the generality of subsection (1), the Bank may make regulations prescribing—
(a) certain oversight, policies, procedures, processes, practices, systems, controls, skills, expertise and reporting arrangements which the credit union is required to maintain where the Bank considers this is appropriate in the interest of protecting members’ savings or otherwise appropriate to ensure compliance with the requirements imposed under financial services legislation;
(b) requirements in relation to the oversight, policies, procedures, processes, practices, systems, controls, skills, expertise and reporting arrangements required to be maintained under this section.".".
Amendment agreed to.
SECTION 10
Government amendment No. 22:
In page 11, line 36, to delete "A credit union may" and substitute the following:
"For the purpose of its objects as referred to in section 6 a credit union may".

The amendment sets out the basis on which credit unions may borrow money and links it to the purposes of the credit union objects set out in section 8 of the Credit Union Act 1997. These include the creation of sources of credit for mutual benefit of members, the use and control of members' savings for their mutual benefit and the improvement of the well-being and spirt of the members' community.

SECTION 11

Amendment agreed to.

Amendment agreed to.
Government amendment No. 23:
In page 11, line 38, to delete "The" and substitute the following:
"For the adequate protection of the savings of members of credit unions, the".
Amendment agreed to.
Government amendment No. 24:
In page 11, line 45, after "money" to insert the following:
"(expressed as a monetary amount or as a percentage of some monetary amount or determinable monetary amount)".
Amendment agreed to.
Section 10, as amended, agreed to.
Government amendment No. 25:
In page 12, line 38, after "amount" to insert the following:
"(whether expressed as a monetary amount or as a percentage of some monetary amount or determinable monetary amount)".
Amendment agreed to.
Government amendment No. 26:
In page 13, line 27, after "relates" to insert the following:
"and for the adequate protection of the savings of members of credit unions".
Amendment agreed to.
Government amendment No. 27:
In page 13, line 32, after "the" where it secondly occurs to insert "total, including percentage,".
Amendment agreed to.
Government amendment No. 28:
In page 13, line 43, to delete "The Bank may" and substitute the following:
"For the adequate protection of the savings of members of credit unions the Bank may".
Amendment agreed to.
Government amendment No. 29:
In page 13, line 44, to delete "appropriate" and substitute "necessary".
Government amendment No. 30:
In page 14, subsection (2), between lines 28 and 29, to insert the following:
"(a) there is a subsisting approval given by the Bank under subsection (2) of section 35 of the Principal Act in respect of the limits set out in that subsection,".

The amendment provides for a transitional arrangement whereby an approval by the Central Bank under section 35(2) of the Credit Union Act 1997 in respect of longer term lending by a credit union would continue to have effect upon commencement of this section. Amendments Nos. 25 and 27 were discussed with amendment No. 18. These are minor technical amendments which allow the regulations to set limits in the form of a monetary amount as well as a percentage amount.

Amendment agreed to.
Section 11, as amended, agreed to.
SECTION 12
Government amendment No. 31:
In page 15, line 13, to delete "subsection (5)" and substitute "subsection (6)".

This amendment is minor and corrects a cross-reference.

Amendment agreed to.
Government amendment No. 32:
In page 15, line 22, after "subsection (2)" to insert the following:
"and having regard to the need to avoid undue risk to members' savings".

This amendment enhances the principles behind the regulation making power of the bank in respect of the investments that a credit union may invest in and links it to the need to avoid undue risk to members' savings.

Amendment agreed to.
Government amendment No. 33:
In page 15, line 25, after "investments" to insert the following:
", including, where appropriate, any investment project of a public nature".

The third amendment, No. 33, follows from the discussion on Committee and Report Stages in the Dáil where the Minister committed to examining this section to allow a credit union to invest in public projects. Members will recall a good discussion on Second Stage where a number of colleagues put forward the view that credit unions could invest in public projects. This amendment arises out of a discussion with the Office of the Attorney General on the issue and makes it clear that the power of the Central Bank to make regulations relating to the investments includes scope for making regulations in respect of investments in public projects. The Minister remains open to credit unions coming forward at an early stage to outline their proposals in respect of such investments.

I welcome the amendment. It is an opportunity for credit unions in their own facility to fund projects, whether it be a PPP with a local authority or somebody else, for which they may not be able to get funding. There is another aspect that I ask the Minister of State to consider. While it may not be a PPP project it is important to remember that credit unions are disallowed from funding limited companies. In regard to PPPs, it would be a good if a credit union from a county town was to fund a project within that town for which potentially the local authority or somebody else may be incapable of getting funding. There are many registered charitable organisations and community groups organised on the basis of a limited company that do superb work. While not a PPP, they are organised in this manner as a limited company. Credit unions are disallowed fund limited companies. The best community organisation in the country may require funding, the merits of which may only be understood by the credit union in the local town, but because of the way the community organisation is organised, formed by guarantee and formed as a limited company, a credit union is disallowed from funding it. I am not talking here about opening up credit unions to massive loans to limited companies. This is an issue that needs to be considered specifically for community organisations that are organised in this manner. It is something that would have a community gain as well as a benefit for the credit union. It would be seen as acting not only in the greater good of the individual but in the greater good via a community organisation.

It is a sensible Government amendment that follows on from the debate in the other House and Second Stage here and we will certainly support it. Senator Michael D'Arcy has mentioned a couple of points that I would have raised but it is a sensible amendment and, I hope, it will be utilised by credit unions into the future where they are able to invest in State projects.

The Bill refers to "the classes of investments the credit union may invest in;". We are now suggesting "the classes of investments including, where appropriate, any investment project of a public nature may invest in;". That is wide enough to allow for the point made by Senator Michael D'Arcy.

However, it is predicated on regulations that would follow from the Central Banks. Rather than being too prescriptive in the primary legislation, it makes more sense that this function be given to the Central Bank for the purpose of setting out the rules through which this could occur. The Government was mindful, as outlined in the debate that occurred in the other House and the one that occurred here, that there may well be very useful public projects either through limited companies or public utility companies that could form the basis of investment strategies for the credit unions in future. The purpose of amendment No. 33 is to attempt to meet Members' concerns.

My concern is that if a credit union is prescribed in legislation as being disallowed to lend to a community organisation that is organised as a limited company, I do not know whether amendment No. 33 would be sufficient to overrule that prescribed portion that might be in the primary legislation.

The Bill allows Central Bank regulations to set out the classes of investment in which a credit union may engage. This could be used to allow for investments in a company, where appropriate. The Bill will give the bank the power to set out the regulations in terms of the classes of investments that can be made. If the class is clear in the regulations, it is open for everyone to make proposals in which the credit union might want to invest.

Government amendment No. 35:

In page 19, to delete lines 1 to 5 and substitute the following:

"(6) The board of directors of a credit union shall be elected—

(a) where the organisation meeting occurs after the commencement of this provision (as amended by section 15 of the Credit Union Act 2012), by secret ballot at the organisation meeting and, subject to subsection (16) and section 57, subsequent vacancies on the board of directors shall be filled by secret ballot at an annual general meeting, and

(b) in any other case, by secret ballot at the annual general meeting first occurring after the commencement of this provision (as amended by section 15 of the Credit Union Act 2012) or, if earlier than that annual general meeting, at a special general meeting called for the purpose of such ballot and, subject to subsection (16) and section 57, subsequent vacancies on the board of directors shall be filled by secret ballot at an annual general meeting.".

Amendment agreed to.
Government amendment No. 34:
In page 15, lines 38 and 39, to delete "appropriate" and substitute "necessary".
Amendment agreed to.
Section 12, as amended, agreed to.
Sections 13 and 14 agreed to.
SECTION 15

This amendment makes provision for the election of a board of directors at the first AGM or SGM called after the organisation meeting of a new credit union. This amendment is necessary to ensure consistency between the board oversight and the way boards of directors are elected. The amendment provides a transitional arrangement for the election of the board of directors at the first AGM or SGM following the commencement of this section. This is necessary to give effect to the decrease in the maximum number of directors that may be appointed to the board under the Bill, a reduction from a maximum of 15 to a maximum of 11. There are incorrect cross-references in these amendments and I will introduce amendments on Report Stage to rectify these. These should refer to section 53(15) and not section 53(16).

Amendment agreed to.

Amendments Nos. 36, 40, 41, 44, 46 to 50, inclusive, 55 to 58, inclusive, 69, 76, 169 and 170 are related and may be discussed together.

Government amendment No. 36:
In page 19, lines 11 and 12, to delete ", (13) and (14)" and substitute "and (12)".

Amendment No. 40 removes subsections (12) and (13) as these were provided for in new fitness and probity requirements which are to be rolled out for credit unions on a phased basis as recommended by the Commission on Credit Unions. Amendments Nos. 36, 41, 44, 46 to 50, inclusive, 69, 169 and 170 amend the cross-references following the deletion of subsections (12) and (13) by amendment No. 40. The majority of these amendments are simply consequential on amendment No. 40.

Amendment No. 55 amends section 17(1)(f). This section provides that a person performing management functions in a credit union must have particular knowledge, skills, experience, qualifications, competence, capacity and probity to carry out these duties effectively. This is being deleted, as it will be covered separately under the fitness and probity regime which will be rolled out for credit unions over time.

The application of fitness and probity requirements was agreed with the Commission on Credit Unions.

Amendment No. 56 deletes subsection (1)(p) as it refers to requirements set out in subsections (12) and (13) of section 53. As these subsections are being deleted, subsection (1)(p) is invalid. Amendments Nos. 57 and 58 make the consequential cross-references arising from the deletion of paragraph (p).

Amendment No. 76 deletes section 68A(5)(b) and (c) as inserted by section 21. When appointing a person as a manager, it is necessary to ensure that the person appointed complies with all legal requirements. The list of criteria which a manager must fulfil is being deleted. These are standards which will be set out under the fitness and probity requirements which will apply to credit unions in line with the recommendation of the commission. These measures will be rolled out to credit unions over time and will take account of the nature, scale and complexity of a credit union. This amendment ensures that the person appointed as manager complies with all legal requirements, including requirements prescribed by the Bank.

Amendments Nos. 169 and 170 correct the cross-references arising out of the deletion of sections 53(12) and (13), as inserted by section 15. In plain English, as a consequence of inserting in the probity section, we are amending the other parts of the primary legislation to have regard to that. This will all be tied up in the context of the standard and probity functions for managers, which are to be set out as per the recommendation of the commission.

Amendment agreed to.

Amendment No. 37 is a Government amendment. Amendments Nos. 37 to 39, inclusive, and 175 are related. Amendment No. 38 is an alternative to amendment No. 37. Therefore, amendments Nos. 37 to 39, inclusive, and 175 may be discussed together by agreement.

Government amendment No. 37:
In page 19, to delete lines 25 to 30 and substitute the following:
"(a) an employee or voluntary assistant of the credit union or an employee of any other credit union;
(b) a member of the board oversight committee of the credit union;".

These amendments relate to eligibility for membership of the board of directors and have arisen from constructive debates with Members from both Houses of the Oireachtas in recent weeks. This was another issue that Senators Reilly, Byrne, Gilroy and Michael D'Arcy raised in terms of the membership of the board of directors and we are attempting to meet this by way of the amendment.

The effect of these amendments reduces the exclusions that would apply to the membership of the board. These exclusions were in place in the original Bill and, following consultation, the Minister has agreed to change them. Amendment No. 37 allows volunteers of other credit unions as well as a member of the board oversight committee of another credit union to be on the board of the credit union.

Amendment No. 38, from Senators Reilly, Cullinane and Ó Clochartaigh, proposes to delete a voluntary assistant from the list of exclusions from the board of directors. A number of amendments have been made to board exclusions today. However, it is not appropriate to remove volunteers from the list of exclusions on the board of directors. The core change at the centre of the governance provision in the Bill is to separate the role of the board in overseeing the credit union's operations from the day-to-day operations themselves. These exclusions are designed to ensure that persons are not overseeing their own work and answerable to themselves. I do not propose to accept this amendment.

Amendment No. 39 removes the prohibition on family members of volunteers of the credit union becoming directors. This also removes the express exclusion of members who are in arrears greater than 90 days and instead, provides that the credit union rules should apply with the eligibility of such a member.

Amendment No. 175 is a follow-on from amendment No. 39. This amendment provides that the rules of a credit union must set out how the credit union will deal with members of the boards of directors and board oversight committee who are in arrears greater than 90 days, and including suspension and removal of the director.

The exclusion of volunteers is an issue about which I feel strongly. I am happy to recognise some movement has been made and the prohibition has been narrowed down to voluntary assistants being on the board of their own credit union. However, there is no need for this prohibition to remain in the Bill. It will have a particularly severe impact on smaller credit unions which typically rely to a greater level on voluntary input. It is often viewed exclusively as a problem for small rural credit unions but it is equally an issue in urban areas where there are many small credit unions. The impact of these exclusions will be felt particularly by smaller credit unions as the pool of available volunteers is already quite small, as was detailed by other Senators on Second Stage. These exclusions will shrink the pool further.

Voluntary assistants help reduce the cost burden on credit unions as they provide their services at little or no cost. The use of board members as voluntary assistants provides a link between the board and the front line. Board members can see first-hand the practical impact of their decisions and can use experience of working on the coal face to generate ideas on how to improve services for members and the credit union generally. This consideration also applies to larger credit unions. The issue needs to be dealt with and it is the final hurdle in the section. The amendment is very important and I ask the Minister of State to support it now or on Report Stage.

I agree with Senator Reilly and will table the amendment again on Report Stage, if appropriate. It is unnecessarily restrictive with regard to volunteers but I welcome that the Minister of State has extended the eligibility of those who might serve. The preclusions prior to this were too restrictive and it is a way forward. What is the view of the Minister of State on smaller credit unions in rural and urban areas which depend to a large degree on volunteer support? How does the Minister of State see these being affected, particularly when it comes to the restrictions on the terms for which people are able to serve? This will have a further impact. I understand the theory behind it but I am concerned about the practice. Will the Minister of State elaborate further on this before we decide how to proceed?

As the leader of the Opposition stated, we all accept the necessity for a governance structure which is clear and transparent for everyone, and for making a distinction between operations on a day-to-day basis and the governance of the board. It is only appropriate from a prudential basis that we should attempt to put in place this distinction. My understanding is that Senator Reilly will propose an amendment with regard to where a credit union cannot get someone and whether some of these could be over-----

To be waived by the Central Bank.

We will not accept the amendment but we will put forward our own to express the Senator's position more clearly in the Bill. An argument has been put forward with regard to circumstances in which a credit union cannot get anyone, and we will make provision for it in a later amendment. I will provide the Senator with the reference to it in a moment. The exclusion issue was very hotly debated in both Houses and we have gone as far as we can in terms of reflecting the consensus position of colleagues in both Houses. The reworked section 15 on the board of directors and narrowing the exclusions will be to the benefit of the Bill. I take the point with regard to a credit union not being able to get someone and we have attempted to deal with it to express Senator Reilly's views on it. As we go through Committee Stage the Senator will see this.

Will the Minister of State read the proposed Government amendment?

It is amendment No. 127. The problem is that as we have not yet reached it, I cannot read it. I am hamstrung by the Cathaoirleach.

Amendment No. 127 is not before the House.

No, it is not, but it is relevant.

Amendment No. 127, which I am not allowed to discuss, attempts to argue for exceptional cases on term limits.

Is that in view of permanence?

To what amendment is the Minister of State referring?

Amendment No. 127.

I can grant the Minister of State discretion to speak about it, if he wants.

Excellent. Am I allowed to discuss amendment No. 127?

No, the amendments must be taken in sequence, but the Minister of State can discuss it now, if it is relevant to the group of amendments.

We will see in a minute if it is relevant.

It is. The purpose of amendment No. 127 is to allow the Central Bank to appoint a director under section 95A, even when that person may have exceeded the term limits set out in section 53(14) and section 76(N)(5). This addresses an issue raised by Deputy Pearse Doherty in the Dáil - the perfect symmetry between the Dáil and the Seanad is often explored and understood, as I know myself having been on the other side of the House - and again by Senator Reilly with amendments Nos. 43 and 115, namely, allowing for term limits not to be applied in exceptional circumstances. The amendment deals with a situation where it is necessary to enhance or improve the expertise of a board, for example, where the term limit meant it was deficient in this respect. This section provides that the bank may require the appointment of an additional director in such circumstances. It is being amended so that where a credit union is unable to source a director to meet the necessary requirements, it may nominate a director who would otherwise be excluded because of the term limits. The provision addresses the point that was raised by Deputy Pearse Doherty in the other House and Senator Reilly in this House without fundamentally compromising the core principle the Minister is looking to provide for in the Bill.

Is that just in terms of the term limit?

Is it the detail of the terms?

Yes, the details.

Is it a term limit but restricted to the qualifications?

Yes. For the information of the House, there is also a reference to the nine-year term in section 20 which relates to the nomination committee. This will be amended to refer to the new 12-year term and I shall table an amendment to this effect on Report Stage.

Amendment agreed to.

Amendment No. 38 cannot be moved.

Amendment No. 38 not moved.
Government amendment No. 39:
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.”.
Amendment agreed to.
Government amendment No. 40:
In page 20, to delete lines 32 to 49 and in page 21, to delete line 1.
Amendment agreed to.
Government amendment No. 41:
In page 21, line 2, to delete “(14) A member of” and substitute “(12) A member of”.
Amendment agreed to.

Amendments Nos. 42 and 45 are related and may be discussed together.

Government amendment No. 42:
In page 21, line 4, to delete “9 years” and substitute “12 years”.

These amendments increase the term limits for the membership of the board of directors. During Report Stage in the Dáil, the Minister stated that he intended to bring forward an amendment, following consultation with the Office of the Attorney General, to change the term limit to 12 years in aggregate in a 15-year period. The commitment is now reflected in these amendments and it strikes an appropriate balance between promoting board rotation and protecting the volunteer ethos of credit unions. Amendment No. 43 deals with possible exceptions to term limits.

I wish to comment on amendment No. 42. The change is welcome and it was also a concern of the credit union movement. How will the Department monitor these changes? Most of the regulation is welcome and the Irish League of Credit Unions has done a good job of engaging with the Government and the Department on issues about which it is concerned. The league understands the day-to-day management of its institutions.

I am grateful that the change we called for on Second Stage has been made and that there is general consensus on it. As regards the review of how this will work, however, I do not know if the Department or the Central Bank has information on the existing directors of credit union boards concerning what the impact of this measure will be. I note the Minister of State is bringing forward another amendment that would allow for this to be set aside in exceptional circumstances. Many of the people who have served in credit unions for a long number of years have brought invaluable experience and expertise to this area. I would be greatly concerned, however, that we would lose much of that experience. What fail-safe mechanism does the Minister of State's Department and the Central Bank have in place to ensure that does not happen?

There have been issues with a small minority of credit unions, but that is a credit to the whole movement when one considers that the majority of banks got into difficulty. The vast majority of credit unions have operated extremely well in difficult times, so we should not use a sledge-hammer to crack a nut in this regard. While welcoming the changes the Government has made, I am still concerned that in a few years much of the experience and expertise will be lost. Will we see numerous credit unions applying for exemptions or exceptions with the Central Bank and, if so, will they become the rule? Does the Minister of State plan to review how this is working? What information does the Central Bank have to hand at this stage on the make-up of credit union boards?

It makes no difference now because the application of this will only emerge when the Bill has been enacted. As I understand it will be another year before the full Bill is operational, there is no retrospection. Given the fact that the 12-year rule on aggregate over 15 years would have to apply, looking forward I suspect we will have a decade to re-examine credit union legislation. It seems to be on the agenda every ten years or so. This legislation does not seek in any way to trample across the number of years people have currently served. I fully accept what the Senator is saying and we must have a common sense approach to this matter. The amendment is an attempt to gain that consensus in both Houses. In fairness to colleagues, this was flagged on all sides and the Minister for Finance is trying to reflect that fact in the amendment before us.

As regards the timeframe, once the Bill is passed it will take another year for the full legislation to have an impact. Therefore it is really-----

-----from, I presume, January 2014 that the 12 years will apply.

The Senator's second question was whether we would see how this is operating within the next five to ten years and I think we will. It has no retrospection because one could have served 50 years.

Therefore, in 12 years time when the Minister of State is Minister for Finance, he is committed to re-examining this issue.

I suspect that Ireland will be in a much better place without me in 12 years time.

He will be Taoiseach then.

Amendment agreed to.

Amendments Nos. 43, 115 and 127 are related and may be discussed together, by agreement. Is that agreed? Agreed.

I have answered the Senator on this matter.

Yes. I do not propose to move amendment No. 43. Based on the Minister of State's response, I will have a look at amendment No. 127 to which he referred. The whole purpose of amendments Nos. 43 and 115 concerns the need for some kind of safety mechanism to be built into the legislation for those cases where credit unions and boards find themselves unable to meet the requirements that are set out in the Bill and need to apply for a waiver in exceptional circumstances. Such a safety mechanism will obviously have to meet with the approval of the registrar of credit unions and the Central Bank.

Based on the Minister of State's comments, I do not intend to press these amendments but I will give consideration to his amendment before Report Stage.

As I told the Senator earlier, the Government is introducing its own amendment No. 127, rather than accepting her amendments Nos. 43 and 115. The Department believes this will deal with the point she and her colleague, Deputy Pearse Doherty, have made both in this House and the Dáil in respect of the exception and makes provision for that in the Bill. The point highlighted in this House by the Senator both on Second Stage and today, as has her colleague in the Dáil, is well worth making. Notwithstanding the approval of the House, which I do not wish to second-guess, the improvement that will come about as a result of amendment No. 127 will greatly enhance the Bill in clearing up an area which the Senator and her colleague have raised. This is the reason the Minister will bring amendment No. 127 before the House later.

Amendment No. 43 not moved.
Government amendment No. 44:
In page 21, line 7, to delete “(15) For directors of” and substitute “(13) For directors of”.
Amendment agreed to.
Government amendment No. 45:
In page 21, line 10, to delete “9 year” and substitute “12 year”.
Amendment agreed to.
Government amendment No. 46:
In page 21, line 11, to delete “subsection (14)” and substitute “subsection (12)”.
Amendment agreed to.
Government amendment No. 47:
In page 21, line 13, to delete “(16) Directors of a” and substitute “(14) Directors of a”.
Amendment agreed to.
Government amendment No. 48:
In page 21, line 18, to delete “(17) Subject to the” and substitute “(15) Subject to the”.
Amendment agreed to.
Government amendment No. 49:
In page 21, line 23, to delete “(18) A director appointed” and substitute “(16) A director appointed”.
Amendment agreed to.
Government amendment No. 50:
In page 21, line 23, to delete “subsection (17)” and substitute “subsection (15)”.
Amendment agreed to.
Government amendment No. 51:
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.”.”.

This is a minor technical amendment that clarifies that the secretary must inform the Central Bank where all directors intend to resign on the same day.

Amendment agreed to.
Government amendment No. 52:
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 “subsection (1)” in line 34 and substitute the following:
“to a reduction in the number of board of directors in compliance with that Act”.
Amendment agreed to.
Section 15, as amended, agreed to.
SECTION 16
Government amendment No. 53:
In page 22, lines 1 and 2, to delete “shall be entitled to attend and”.

This amendment removes unnecessary wording, as the secretary is a board member and as such is entitled to attend board meetings.

Amendment agreed to.
Section 16, as amended, agreed to.
SECTION 17

Amendments Nos. 54, 60 to 64, inclusive, 66, 67, 70 to 75, inclusive, 87, 89, 91 and 92 are related and may be discussed together, by agreement. Is that agreed? Agreed.

Government amendment No. 54:
In page 23, line 26, after “manager” to insert “, risk management officer and compliance officer”.

Amendment No. 54 is being made to include the appointment of the risk management officer and compliance officer as one of the functions of the board. While the current wording provides these appointments as functions of the manager, such appointments are, however, more appropriate to the board itself. The deletions of subsections (4) and (5) are consequential to this amendment, as these matters now will be provided for in the new section 55(1)(e). Amendment No. 55 already has been dealt with under amendment No. 36 in section 15, as was amendment No. 56. This latter amendment deletes the famous new section 55(1)(p), as it refers to requirements set out in subsections (12) and (13) of section 53. As these subsections are being deleted, section 55(1)(p) is invalid. I believe I have already made this point to the House. Amendments Nos. 60 to 64, inclusive, 66, 67, 70 to 75, inclusive, 87, 89, 91 and 92 are consequential amendments that arise out of the changes being made to the functions of the board of directors by amendment No. 54.

Amendment agreed to.
Government amendment No. 55:
In page 23, to delete lines 29 to 36 and substitute the following:
“(f) ensuring that there is an effective management team in place;”
Amendment agreed to.
Government amendment No. 56:
In page 25, to delete lines 16 to 18.
Amendment agreed to.
Government amendment No. 57:
In page 25, line 19, to delete “(q) the recommendation to” and substitute “(p) the recommendation to”.
Amendment agreed to.
Government amendment No. 58:
In page 25, line 21, to delete “(r) ensuring the accounts” and substitute “(q) ensuring the accounts”.
Amendment agreed to.
Government amendment No. 59:
In page 25, to delete lines 23 and 24 and substitute the following:
“(r) reporting to the members of the credit union at the annual general meeting, including nominating a member of the board to present the annual accounts at the annual general meeting;
(s) reviewing and considering any update of financial statements provided to the board by the manager under section 63A(4)(c).”.

Amendment No. 59 allows the board to nominate a director to present the accounts to members at the AGM. This role was previously performed by the treasurer. However, as the position of treasurer is being removed, the amendment is being introduced to maintain the reporting roles in a different way. The amendment also provides that it is the role of the board to consider any updated financial statements provided to it by the manager and mirrors the provisions in section 63A(4)(c). Other amendments are minor technical amendments that are required to correct cross-references consequential on the amendments proposed.

Amendment agreed to.
Government amendment No. 60:
In page 25, to delete lines 35 to 42.
Amendment agreed to.
Government amendment No. 61:
In page 26, line 1, to delete “(6) The board of” and substitute “(4) The board of”.
Amendment agreed to.
Government amendment No. 62:
In page 26, line 5, to delete “(7) The review carried” and substitute “(5) The review carried”.
Amendment agreed to.
Government amendment No. 63:
In page 26, line 6, to delete “subsection (6)” and substitute “subsection (4)”.
Amendment agreed to.
Government amendment No. 64:
In page 26, line 7, to delete “(8) In respect of” and substitute “(6) In respect of”.
Amendment agreed to.
Government amendment No. 65:
In page 26, line 10, to delete “either”.

The amendment is straightforward. It proposes to delete the words “either” from the sentence concerned as its inclusion is a typographical error.

Amendment agreed to.
Government amendment No. 66:
In page 26, line 14, to delete “(9) Where the board” and substitute “(7) Where the board”.
Amendment agreed to.
Government amendment No. 67:
In page 26, line 17, to delete “(10) The board shall” and substitute “(8) The board shall”.
Amendment agreed to.
Section 17, as amended, agreed to.
SECTION 18
Government amendment No. 68:
In page 27, line 26, to delete “3 consecutive terms” and substitute “4 consecutive terms”.

Amendment No. 68 increases the maximum consecutive term for the chair from three years to four. The term of office of the chair is for a period of one year. Currently, a chair is not permitted to serve more than three consecutive terms in the position. The Minister, Deputy Noonan, agreed on Committee Stage in the Dáil to increase the maximum consecutive term for the chair from three years to four. This will ensure continuity on the board. However, it will also be one of the responsibilities of the nomination committee to ensure board continuity. That was also an issue that arose in the select committee in the other House and from some of the contributions made in the Seanad on Second Stage. I am notching up the number of amendments accepted. It is currently six. This is one of the sensible proposals from the Opposition.

Amendment agreed to.
Section 18, as amended, agreed to.
Section 19 agreed to.
SECTION 20
Government amendment No. 69:
In page 30, lines 24 and 25, to delete “in respect of section 53(17)” and substitute “for the purposes of section 53(15)”.
Amendment agreed to.
Section 20, as amended, agreed to.
SECTION 21
Government amendment No. 70:
In page 33, to delete lines 26 to 28.
Amendment agreed to.
Government amendment No. 71:
In page 33, line 29, to delete “(e) appointing or causing” and substitute “(d) appointing or causing”.
Amendment agreed to.
Government amendment No. 72:
In page 33, line 34, to delete “(f) preparing or causing” and substitute “(e) preparing or causing”.
Amendment agreed to.
Government amendment No. 73:
In page 33, line 37, to delete “(g) implementing the proper” and substitute “(f) implementing the proper”.
Amendment agreed to.
Government amendment No. 74:
In page 33, line 39, to delete “(h) ensure that all” and substitute “(g) ensure that all”.
Amendment agreed to.
Government amendment No. 75:
In page 33, line 41, to delete “(i) such other matters” and substitute “(h) such other matters”.
Amendment agreed to.
Government amendment No. 76:
In page 33, to delete lines 43 to 48 and in page 34, to delete lines 1 to 14 and substitute the following:
“(5) In appointing a person as manager of a credit union, its board of directors shall ensure that the person complies with all legal requirements (including requirements which the Bank may prescribe) to be appointed.”.”.
Amendment agreed to.
Section 21, as amended, agreed to.
Section 22 agreed to.
SECTION 23
Government amendment No. 77:
In page 35, to delete lines 8 to 46 and in page 36, to delete lines 1 to 8 and substitute the following:
“ “66.—(1) If the board oversight committee of a credit union considers that a member of the board of directors has taken any action or decision which, in the opinion of the committee, given in writing to the director concerned, is not in accordance with the requirements of this Part, then, after consulting the Bank, the committee may either—
(a) suspend, with immediate effect, the director by a unanimous vote of all the members of the committee taken at a meeting of the committee called for the purpose of considering the director’s suspension, or
(b) convene a special general meeting of the credit union to consider whether to remove the director in the light of the action or decision taken by that director,
but no steps shall be taken under this subsection without the director concerned being given an opportunity to be heard by the members of the board oversight committee.
(2) Where a director of a credit union has been suspended by the board oversight committee in accordance with subsection (1), the board oversight committee shall, within 7 days of that suspension, convene a special general meeting—
(a) for the purpose of reviewing the suspension, and
(b) to consider whether to remove the director having regard to the action or decision taken by that director.
(3) Where the board oversight committee convenes a special general meeting for the purposes of this section the credit union may, by resolution of a majority of the members present and voting at that special general meeting—
(a) ratify the suspension of the director concerned and remove that director from office,
(b) rescind the suspension of that director, or
(c) remove that director from office,
but no director shall be so removed from office without being given an opportunity to be heard by the members present at the meeting.
(4) The secretary of the credit union shall, not less than 21 days before the date of the special general meeting at which it is proposed to move a resolution referred to in subsection (3), give written notice of that meeting to the member concerned.
(5) Where notice is given of an intended resolution to remove a director under this section and the director concerned makes in relation to it representations (not exceeding a reasonable length) in writing to the credit union and requests their notification to the members of the credit union then, unless the representations are received by it too late for it to do so, the credit union shall, subject to subsection (7)—
(a) in any notice of the resolution given to members of the credit union, state the fact of the representations having been made, and
(b) send a copy of the representations to every member of the credit union to whom notice of the meeting is sent.
(6) Subject to subsection (7), and whether or not copies of any representations made by it have been sent as mentioned in subsection (5), the director concerned may require that, without prejudice to his or her right to be heard orally, the representations made by him or her shall be read out at the special general meeting.
(7) Subsections (5) and (6) shall not apply if, on the application either of the credit union or of any person who claims to be aggrieved, the Bank is satisfied that compliance with the subsections would diminish substantially public confidence in the credit union or that the rights conferred by those sections are being, or are likely to be, abused in order to secure needless publicity for defamatory matter.
(8) Where a director of a credit union is removed from office at a special general meeting pursuant to this section, the vacancy caused by the removal shall be filled in such manner as may be determined by the meeting.”.”.

The amendment sets out new provisions concerning the suspension and removal of directors by the board oversight committee. Issues arose in the Dáil on the procedure for the suspension and removal of directors, in particular in terms of the director concerned being provided with written notification of the board oversight committee’s reasons for taking action under the section.

The Minister, on Committee and Report Stages in Dáil Éireann, and when the issue was raised on Second Stage in the Seanad, indicated his willingness to re-examine the provisions. This amendment reflects the changes necessary to address the concerns raised in both Houses. It brings the procedure for removing a director at a special general meeting convened under this section into line with the procedure for the removal of a director from office by members of a credit union, as set out in section 56 of the 1997 Act, thereby ensuring greater procedural consistency. Under this section, the board oversight committee can suspend a director where it considers that a member has taken any action or decision which is not in accordance with Part IV of the 1997 Act. The board oversight committee is required to provide written notice to the director, setting out the reasons for its decision before either suspending the director or convening a special general meeting of the credit union to consider whether to remove the director.

Where a director is suspended by the board oversight committee under this section, the suspension takes effect immediately and if the director in question has not resigned within seven days of being suspended, the committee shall convene a special general meeting to review the suspension and consider whether to remove the director. At a special general meeting convened in accordance with this section, the members may ratify or rescind the suspension or remove the director from office. This amendment provides, in a similar manner to section 56 of the 1997 legislation, that a director is entitled to written notice of a special general meeting to be held under this section not less than 21 days in advance of the meeting. The amendment also sets out the procedure for the director in question to make written representations in advance of a special general meeting and that the director has the right to be heard orally at such a meeting.

The Minister is confident that the amendment addresses the concerns raised by Members of both Houses on Second Stage. A further amendment will be tabled on Report Stage to clarify that if the director resigns, the special general meeting must be held within seven days after the 21 day period of notice to be given to members. Under the current wording, the special general meeting must be held within seven days of the decision, even though notification of the meeting must be given at least 21 days in advance.

On the key issue of the suspension or removal of the board oversight committee, the Minister has attempted to create a degree of consistency with section 56 of the original 1997 Act to provide certainty and clarity on the rights of individuals. Where the oversight committee takes this action, written notice will be given and the person in question will have a right to reply. Further, within a timeframe set out in the amendment, a special general meeting will be held at which various options placed before members.

Amendment agreed to.
Section 23, as amended, agreed to.
SECTION 24
Government amendment No. 78:
In page 36, line 43, after “Bank” to insert the following:
“including regulations setting out the form and content of that statement”.
This amendment clarifies that the requirements which the bank may prescribe under section 66C(1) relate to the form and content of the compliance statement to be provided to it by credit unions.
Amendment agreed to.
Section 24, as amended, agreed to.
SECTION 25

Amendments Nos. 79 to 86, inclusive, may be discussed together.

Government amendment No. 79:
In page 37, between lines 43 and 44, to insert the following:
“(ii) where the officer is the secretary, in writing to the board of directors and served on the chair,”.

Amendment No. 79 ensures the secretary acts at all times in a manner that is free from conflict. If this was useful in a political party, I suspect it might be useful in a credit union as well. Where a potential conflict is identified between his or her interests and those of the credit union, the secretary must declare in writing to the board the nature of his or her own interests and serve notice of that conflict on the Chair. Other amendments I have tabled are minor technical amendments that correct cross-references that are consequential on the amendment proposed. The substance of amendment No. 79 in terms of conflicts of interest is a pretty standard provision in legislation and is simply being transposed here in the same way it would be in any similar legislation.

Amendment agreed to.
Government amendment No. 80:
In page 37, line 44, to delete "(ii) where that officer" and substitute "(iii) where that officer".
Amendment agreed to.
Government amendment No. 81:
In page 37, line 47, to delete "(iii) where that officer" and substitute "(iv) where that officer".
Amendment agreed to.
Government amendment No. 82:
In page 37, line 48, after "secretary," to insert "or".
Amendment agreed to.
Government amendment No. 83:
In page 38, to delete lines 1 and 2.
Amendment agreed to.
Government amendment No. 84:
In page 38, line 40, to delete "paragraph (i) or (ii)" and substitute "paragraph (i), (ii) or (iii)".
Amendment agreed to.
Government amendment No. 85:
In page 38, line 45, after “or” to insert the following:
"where the director concerned is the secretary, in accordance with paragraph (ii) of that subsection, or".
Amendment agreed to.
Government amendment No. 86:
In page 38, line 47, to delete "paragraph (ii)" and substitute "paragraph (iii)".
Amendment agreed to.
Section 25, as amended, agreed to.
SECTION 26
Government amendment No. 87:
In page 41, lines 15 to 17, to delete all words from and including "The" in line 15 down to and including "union," in line 17 and substitute "The board of directors of a credit union shall".
Amendment agreed to.

Amendments Nos. 88 and 90 are related and may be discussed together, by agreement. Is that agreed? Agreed.

Government amendment No. 88:
In page 41, line 19, to delete "authority, resources and experience" and substitute "authority and resources".

Amendments Nos. 88 and 90 reflect the changes in the functions of the board to include the appointment of a risk management officer and a compliance officer. The current wording provides that the manager of the credit union will carry out these functions. However, as these functions are proper to the board, that is why they are being separated. These amendments delete the reference to the risk management officer or compliance officer having the necessary experience to manage the functions of the role. This does not need to be provided for here as these standards will be set out under the fitness and probity regime which will be agreed with the Commission on Credit Unions. These measures will be rolled out in credit unions over time and will take account of the nature, scale and complexity of a credit union.

Amendment agreed to.
Government amendment No. 89:
In page 42, lines 17 to 19, to delete all words from and including "The" in line 17 down to and including "“union," in line 19 and substitute "The board of directors of a credit union shall".
Amendment agreed to.
Government amendment No. 90:
In page 42, line 21, to delete "authority, resources and experience" and substitute "authority and resources".
Amendment agreed to.
Government amendment No. 91:
In page 50, line 27, to delete "section 55(10)" and substitute "section 55(8)".
Amendment agreed to.
Government amendment No. 92:
In page 50, line 39, to delete "section 55(10)" and substitute "section 55(8)".
Amendment agreed to.
Section 26, as amended, agreed to.
SECTION 27

Amendments Nos. 93, 95 and 118 to 120, inclusive, are related and may be discussed together, by agreement. Is that agreed? Agreed.

Government amendment No. 93:
In page 51, lines 44 and 45, to delete "section 76S(4)" and substitute "section 76R(4)".

Amendment No. 118 deletes section 76Q(1), (2) and (3) as this subsection sets out the skill requirements and training requirements for committee members. However, as noted previously, these standards will be set out separately under the fitness and probity regime. The remaining amendments in this group are minor technical amendments.

Amendment agreed to.

Amendments Nos. 94, 96 and 117 are related and may be discussed together, by agreement. Is that agreed? Agreed.

Government amendment No. 94:
In page 52, line 6, after "earlier" to insert "than that annual general meeting".

Amendments Nos. 94, 96 and 117 are also technical in nature and are consequential on the tabling of other amendments.

Amendment agreed to.
Government amendment No. 95:
In page 52, line 8, to delete "section 76S(4)" and substitute "section 76R(4)".
Amendment agreed to.
Government amendment No. 96:
In page 52, line 20, to delete “subsection (4) or (5)” and substitute “subsection (4), (5) or (6)”.
Amendment agreed to.

Amendments Nos. 97 to 113, inclusive, and amendment No. 116 are related and may be discussed together. Is that agreed? Agreed.

Government amendment No. 97:
In page 52, to delete lines 35 to 38 and substitute the following:
“(a) an employee or voluntary assistant of the credit union or an employee of any other credit union;”.

This group of amendments refers to the exclusion from the board oversight committee which is contained in section 27. There was much constructive debate in the Dáil and on Second Stage in the Seanad about the eligibility for membership of the board oversight committee. A number of amendments were proposed earlier relating to section 53(10) regarding changes to the exclusion from the board of directors. These amendments are proposed to ensure consistency between the board and the board oversight committee. The effect of these amendments reduces the exclusions that would apply to membership of the board oversight committee.

Amendment No. 97 allows volunteers of other credit unions to be on the board oversight committee of a credit union. The Minister already flagged this amendment. Amendment No. 108 removes the prohibition on family members of volunteers of the credit union becoming board oversight committee members. Amendment No. 98 allows for a director of another credit union to become a board oversight committee member. This is also something the Minister, Deputy Noonan, said he would concede. An amendment to this section will be made on Report Stage to clarify that a member of the oversight committee of the credit union cannot also sit on the board of directors of the same credit unions; this is already provided for under section 15 but I will table an amendment to clarify this on Report Stage. In error, amendment No. 98 provides that a director of the credit union be eligible also for membership of the board oversight committee of the same credit union. I intend to bring forward an amendment on Report Stage to correct this.

Amendment No. 106 makes a change to the exclusion of auditors from the board oversight committee. This exclusion will now include a person employed or engaged by that auditor. This is to guard against any conflicts of interest. Amendment No. 111 deletes section 76N(4)(q) in line with the changes for exclusions from board membership. Amendment No. 112 ensures that where a committee member falls under any exclusion provisions, that member should resign from the committee.

Amendment agreed to.
Government amendment No. 98:
In page 52, to delete lines 41 and 42.
Amendment agreed to.
Government amendment No. 99:
In page 52, line 43, to delete “(d) an employee of” and substitute “(c) an employee of”.
Amendment agreed to.
Government amendment No. 100:
In page 52, line 48, to delete “(e) a public servant” and substitute “(d) a public servant”.
Amendment agreed to.
Government amendment No. 101:
In page 53, line 3, to delete “(f) a member of” and substitute “(e) a member of”.
Amendment agreed to.
Government amendment No. 102:
In page 53, line 5, to delete “(g) an officer (within” and substitute “(f) an officer (within”.
Amendment agreed to.
Government amendment No. 103:
In page 53, line 10, to delete “(h) Financial Services Ombudsman” and substitute “(g) Financial Services Ombudsman”.
Amendment agreed to.
Government amendment No. 104:
In page 53, line 15, to delete “(i) a member of” and substitute “(h) a member of”.
Amendment agreed to.
Government amendment No. 105:
In page 53, line 18, to delete “(j) the chief executive” and substitute “(i) the chief executive”.
Amendment agreed to.
Government amendment No. 106:
In page 53, to delete line 24 and substitute the following:
“(j) the auditor of the credit union or a person employed or engaged by that auditor;”.
Amendment agreed to.
Government amendment No. 107:
In page 53, line 25, to delete “(l) a solicitor or” and substitute “(k) a solicitor or”.
Amendment agreed to.
Government amendment No. 108:
In page 53, to delete lines 29 to 36 and substitute the following:
“(l) a person who is a spouse or civil partner, cohabitant, parent or child, of a director, board oversight committee member or employee of that credit union;”.
Amendment agreed to.
Government amendment No. 109:
In page 53, to delete line 37 and substitute the following:
“(m) a body corporate;”.
Amendment agreed to.
Government amendment No. 110:
In page 53, to delete line 38 and substitute the following:
“(n) a person who is not of full age.”.
Amendment agreed to.
Government amendment No. 111:
In page 53, to delete lines 39 to 46.
Amendment agreed to.
Government amendment No. 112:
In page 53, between lines 46 and 47, to insert the following:
“(5) A person shall resign from being a member of the board oversight committee of a credit union if and when he or she becomes a person to whom any of the provisions of subsection (4) relates.”.
Amendment agreed to.
Government amendment No. 113:
In page 53, line 47, to delete “(5) A board oversight” and substitute “(6) A board oversight”.
Amendment agreed to.
Government amendment No. 114:
In page 53, line 50, to delete “9 years” and substitute “12 years”.

Following on from discussions in this House and Dáil Éireann and in line with amendments to the term limits of directors, the term limit of committee members is being extended from the proposed nine years out of an aggregate 15 years to 12 out of an aggregate 15 years. Amendment No. 115 deals with possible waivers from term limits and is grouped with amendment No. 43 in section 15. There is an incorrect cross-reference on page 51, line 26, which I will amend on Report Stage. It should refer to section 76N, not 76O.

Amendment agreed to.
Amendment No. 115 not moved.
Government amendment No. 116:
In page 54, line 3, to delete "(6) The board oversight" and substitute "(7) The board oversight ".
Amendment agreed to.
Government amendment No. 117:
In page 54, to delete lines 35 to 41 and substitute the following:
"(6) The board oversight committee may notify the Bank of any concern it has, that the board of directors has not complied with any of the requirements set out in this Part or Part IV, or regulations made thereunder, following a unanimous vote at a meeting of the committee called for the purpose of considering such a notification.".
Amendment agreed to.
Government amendment No. 118:
In page 55, to delete lines 34 to 50 and in page 56, to delete lines 1 to 8.
Amendment agreed to.
Government amendment No. 119:
In page 56, line 9, to delete "76R.—(1) Subject to" and substitute "76Q.—(1) Subject to".
Amendment agreed to.
Government amendment No. 120:
In page 57, line 5, to delete "76S.—(1) A register of" and substitute "76R.—(1) A register of".
Amendment agreed to.
Section 27, as amended, agreed to.
Section 28 agreed to.
SECTION 29
Government amendment No. 121:
In page 58, to delete lines 22 to 35.
Amendment agreed to.
Government amendment No. 122:
In page 58, line 36, to delete "84B.—(1) In making regulations" and substitute " "84A.—(1) In making regulations".
Amendment agreed to.
Government amendment No. 123:
In page 59, to delete lines 14 to 20, to delete all words from and including "credit" in line 14 down to and including "commenced."." in line 20 and substitute "credit union.".".
Amendment agreed to.
Section 29, as amended, agreed to.
NEW SECTION

I move amendment No. 124:

In page 59, before section 30, to insert the following new section:

"30.--The Principal Act is amended by the insertion of the following new section after section 84A (inserted by this Act):

"84B.--As soon as is practicable, the Bank shall enter into a memorandum of understanding with credit unions the form of which shall be agreed in consultation with credit unions and representatives bodies.".".

The issue to which this amendment relates has been raised by Sinn Féin on all Stages and has not been satisfactorily dealt with to date. The proposed memorandum of understanding is being confused with the consultation protocol for credit unions. What this amendment seeks is more akin to a customer charter or service level agreement in order that the parties - the Central Bank and the credit unions - know what is expected of them in their mutual dealings.

The example of lending restrictions has been highlighted. In some cases, credit unions have had restrictions and demands imposed upon them without real explanations or, more importantly, guidelines on how to remedy the situation. Credit unions expect and require clarity concerning what they need to do to have restrictions eased or removed. One credit union had a lending restriction communicated to it in writing. A part of that restriction was a complete ban on commercial lending, but it was later alleviated verbally. There is a great deal of confusion. This is of little use to the credit union in question and is certainly no way for a professional regulator to conduct business.

Simple issues such as communication, timeframes and so on could be easily addressed by way of a memorandum of understanding, which we are calling for in this amendment. Such a memorandum would be immediately beneficial, in that it would map out the rule book for the parties. We want our facilities to have the highest standards. This amendment would provide clarity and allow for a much better working relationship between the credit unions and the regulator. Will the Minister of State consider accepting it?

I thank the Senator for her amendment, which would provide for a memorandum of understanding between the Central Bank and credit unions. This issue was discussed in some detail on Committee Stage in the Lower House, when the Minister for Finance made it clear that he would be sticking with the Bill's current provisions. The bank has already published a consultation protocol for credit unions, as recommended by the Commission on Credit Unions. It is not appropriate to place the bank under a statutory obligation to enter into a memorandum of understanding.

The commission recommended that a consultation protocol should be in place between the Central Bank and credit unions. This protocol has been developed following consultation between the Central Bank, the Minister, credit union representative bodies and the Credit Union Advisory Committee, CUAC. The protocol was sent to all credit unions earlier last week and is being worked upon by all of the stakeholders, as requested under the commission's recommendation.

The protocol sets out how the Central Bank proposes to engage with credit unions in any formal consultation process prior to the introduction of new regulations, which is important. The protocol is in place and is fair in dealing with people. The protocol states that the bank is committed to having clear, open and transparent engagement with stakeholders in fulfilling its financial regulation and supervisory objectives.

The bank commits to engage formally and informally with credit union representative bodies and relevant stakeholders, as well as ensuring it complies with any relevant legal obligations relating to consultation. The bank will consult on new regulations that will have a significant impact on the business of credit unions. As part of the consultation process, the bank will invite credit unions, their representative bodies and other stakeholders to make written submissions on new regulations that will be reviewed and considered before regulations are made.

It has been suggested that a broader memorandum of understanding be agreed between the Central Bank and credit unions. I understand that one of the concerns driving this issue is an idea that the Central Bank should issue written directions. The Bill provides for this, as well as for an appeals mechanism. It is important to state that if people feel there is some unfairness in the way in which directions have been issued, there is an appeals mechanism which one could argue gives significant powers to the credit union sector if it is felt that a measure was being unfairly imposed.

I do not propose to follow the memorandum of understanding amendment and, as I stated, it was not recommended by the commission. If this issue was of significance to the commission in making its recommendations, it would have been flagged. That was not the case. We should be careful not to undermine the independence of the regulator. We have all learned enough from the financial crisis to know that the Central Bank must be able to act within its own powers when required. As a result, I do not propose to accept the amendment.

Amendment put and declared lost.
SECTION 30

Amendments Nos. 125 and 126 are related and may be discussed together. Is that agreed? Agreed.

Government amendment No. 125:
In page 59, to delete lines 24 to 26 and substitute the following:
" ‘liquid assets’ means the assets held by a credit union to enable it to meet its obligations as they arise;".

Amendment No. 125 provides a more specific definition of "liquid assets", which is always very useful in these types of Bills. Amendment No. 126 ensures that the proportion of liquid assets to be kept by a credit union will take account of the nature, scale and complexity of a credit union, thus ensuring that a one size fits all approach is not taken and that the composition and maturity of the credit union's assets and liabilities would also be taken into consideration. This is in line with the commission's recommendations regarding a tiered regulatory approach. This measure was in the Bill as published but mistakenly removed in the Bill as amended on Committee Stage in the Dáil. A further amendment may be required to clarify the definition of "maturity mismatch" and I intend to bring this about on Report Stage.

Amendment No. 126 appears to be vague, although I understand the Minister of State will follow up with regulations. Is the wording imprecise? The insertion would state: "The proportion of assets kept in liquid form shall take into account the nature, scale and complexity of the credit union, and the composition and maturity of its assets and liabilities.” Will the Central Bank have a role after the legislation is implemented in drawing up a detailed list of obligations with which credit unions must comply?

Section 30(3) indicates:

The Bank may prescribe the minimum liquidity requirements that a credit union is required to maintain as well as conditions on the application of the minimum liquidity requirements. Regulations made by the Bank for the purpose of this section may deal with other matters

One of the recommendations from the commission was on this idea of a tiered regulatory approach and the objective was that due regard would have to be given to the size of credit unions. As I stated in my reply, a one size fits all approach is not taken on the argument that they are all the same size and all have the same deposit ratios and lending rations because it is not realistic. To have regard to that recommendation from the commission, the power is now being given to the Bank to prescribe the liquidity requirements.

It is important that amendment No. 126 ensures that the proportion of liquid assets to be kept by a credit union will take account of the nature, scale and complexity of a credit union because it allows the Central Bank to do it in a scaled way having regard to that recommendation made by the commission. This is something that will be useful for credit unions, large and small, because the Central Bank must have regard to the liquidity ratio and principles because of the size and scale of credit unions.

I thank the Minister of State.

I raised the matter on Second Stage as well when I pointed out that probably the only financial sector that was lending into the economy was the credit union movement, for which it must be applauded. While the banks massage figures to suggest that they are lending, the reality is that they are transferring loans from, perhaps, bridging loans into other types of loan. The banks are only restructuring loans instead of providing new loans.

While I am cognisant of the fact that the credit unions, the directors and the movement must be protected, all credit unions would acknowledge that they do not want to be so restricted that they will not be in a position to lend into the economy. I say that taking full cognisance of what the Minister of State stated on the need to protect the sector as well. A balance must be struck and I ask him to bear that in mind in whatever regulations are to be drawn up.

I am grateful to Senator Ó Domhnaill for raising this matter. It is worth pointing out, as one looks down through section 30 which deals with this question of liquidity and stress-testing, that as we have become aware of the principle of stress-testing within the banking system, the same principle should logically apply within the credit union sector. If that principle had not applied up until now, provision is being made for it now purely on the basis of ensuring that credit union members' deposits and shares are properly held. One cannot have one without the other. Liquidity and stress-testing are two sides of the one coin. The Minister for Finance made it clear in his contributions in the other House that he does not want these provisions to be used as a hammer to crack over the heads of smaller credit unions which, by definition, scope and size, are in a different league to larger ones. One cannot compare apples and oranges. There is an argument of scale here. It is the Minister's view that the imposition of this section, section 30, in terms of liquidity and stress-testing, and amendment No. 126, will make that argument for the existing diversity of credit unions.

Amendment agreed to.
Government amendment No. 126:
In page 59, line 43, after "arise." to insert the following:
"The proportion of assets kept in liquid form shall take into account the nature, scale and complexity of the credit union, and the composition and maturity of its assets and liabilities.".
Amendment agreed to.
Section 30, as amended, agreed to.
SECTION 31
Government amendment No. 127:
In page 61, line 35, to delete "section 53."." and substitute the following:
"section 53.
(5) Any period of appointment under this section shall not be reckoned for the purposes of calculating the number of years that a person has served in aggregate for the purpose of section 53(12) or section 76N(5).".".
Amendment agreed to.
Section 31, as amended, agreed to.
Sections 32 and 33 agreed to.
SECTION 34
Government amendment No. 128:
In page 62, line 34, after "Part IV" to insert "(other than sections 27B, 27G and 27H)".

This amendment clarifies that sections 27B, 27G and 27H of the Central Bank Act 1997 continue to apply to credit unions. These sections relate to the duties of auditors to provide reports for the Central Bank. Section 27B already makes reference to section 122 of the Credit Union Act 1997. It relates to auditor management and statutory duty declarations. I should emphasise that this amendment is not applying any new provision on credit union auditors; it is simply reflecting provisions that already apply but does so in a more precise way.

Amendment agreed to.
Section 34, as amended, agreed to.
Sections 35 to 38, inclusive, agreed to.
SECTION 39
Government amendment No. 129:
In page 63, to delete line 32 and substitute the following:
" "ReBo" means the Credit Union Restructuring Board;
"stabilisation support" has the meaning given by section 62.".

This amendment provides for the inclusion of a definition of "stabilisation support" in section 39, referring to the definition of "stabilisation support" which already appears in section 62 of the Bill.

Amendment agreed to.
Section 39, as amended, agreed to.
Sections 40 to 43, inclusive, agreed to.
SECTION 44

Amendments Nos. 130 and 131 are related and may be discussed together, by agreement. Is that agreed? Agreed.

Government amendment No. 130:
In page 65, lines 25 to 36, to delete subsection (2) and substitute the following:
"(2) Subject to this Part, ReBo may do anything which it considers necessary or expedient to enable it to perform its functions including making arrangements with any other person or body for the use by it of premises or equipment belonging to that person or other body or for the use by ReBo of the services of officers or servants of that person or other body.".

Amendment No. 130 consolidates the provisions relating to ReBo's power to carry out certain functions. The power to appoint staff is provided for in section 54 and the power to organise meetings is set out in section 50. As a result, unnecessary references in this section to those powers are being removed by this amendment.

Amendment No. 131 deletes section 44(3). Subsection (3) is not required as subsection (2) already provides that ReBo may do anything which it considers necessary to enable it to perform its functions.

Amendment agreed to.
Government amendment No. 131:
In page 65, lines 37 to 45, to delete subsection (3).
Amendment agreed to.
Section 44, as amended, agreed to.
SECTION 45

Amendments Nos. 132, 148, 153 and 154 are related and may be discussed together, by agreement. Is that agreed? Agreed.

Government No. 132:
In page 66, subsection (5)(a), line 37, to delete "funding" and substitute "financial support".

Amendments Nos. 132, 148, 153 and 154 are technical amendments which provide for consistency in the references to "financial support" to be provided from the credit union fund under Parts 3 and 4. Financial support may take the form of a payment, a loan, a guarantee, an exchange of assets or any other kind of financial accommodation or assistance. This is consistent with both the Credit Institutions (Financial Support) Act 2008 and the Central Bank and Credit Institutions (Resolution) Act 2011.

Amendment agreed to.
Section 45, as amended, agreed to.
Section 46 agreed to.
SECTION 47
Government amendment No. 133:
In page 67, lines 39 to 41, to delete subsection (4) and substitute the following:
"(4) The ReBo levy received from each credit union shall be paid into the Credit Union Fund.".

This amendment provides that the ReBo levy which is to be paid by credit unions will be paid into the credit union fund rather than paid into or disposed of for the benefit of the Exchequer. The expenses incurred by ReBo will be paid out of the credit union fund and, therefore, it is appropriate that the levy received to recoup those expenses should be paid into the credit union fund.

Amendment agreed to.
Section 47, as amended, agreed to.
Section 48 agreed to.
SECTION 49
Question proposed: "That section 49 be deleted."

As the expenses of the credit union restructuring board, ReBo, are to be paid from the credit union fund, section 49 is no longer required and, therefore, I propose its deletion.

Does that mean the credit union sector will have to advance in order to set up the fund?

This concerns advances by the Minister in order to set up the ReBo. Does that mean the sector will have to advance the money?

Some 50% will come from the sector and the other 50% will come from the Exchequer. The expenses will come from the fund.

Question put and agreed to.
Section 50 agreed to.
SECTION 51

Amendments Nos. 134 and 136 are related and may be discussed together, by agreement. Is that agreed? Agreed.

Government amendment No. 134:
In page 69, subsection (1)(a), line 25, to delete "the Board of that Board" and substitute "that Board".

Amendment No. 134 removes a typographical error in section 51(1)(a) and amendment No. 136 corrects a typographical error in section 51(4).

Amendment agreed to.
Government amendment No. 135:
In page 69, subsection (1)(f), line 32, after "of" to insert "an auditor,".

This amendment provides that employees of auditors engaged by ReBo are subject to the non-disclosure of information provisions in this section. This amendment ensures consistency in the application of the non-disclosure provisions which the Bill currently applies to employees of agents, consultants and advisers appointed by ReBo.

Amendment agreed to.
Government amendment No. 136:
In page 70, subsection (4), line 10, to delete "the credit" and substitute "credit".
Amendment agreed to.
Section 51, as amended, agreed to.
Sections 52 and 53 agreed to.
SECTION 54

Amendments Nos. 137 and 138 are related and will be discussed together, by agreement. Is that agreed? Agreed.

Government amendment No. 137:
In page 71, subsection (1), lines 32 and 33, to delete all words from and including "given" in line 32 down to and including "Reform" in line 33.

Amendment No. 137 removes the requirement for the Minister for Finance to obtain the consent of the Minister for Public Expenditure and Reform before approving the appointment of staff by ReBo. The staff of ReBo will be paid out of the credit union fund and as a result, the consent of the Minister for Public Expenditure and Reform to their appointment is no longer required. ReBo can, therefore, with the approval of the Minister for Finance, appoint such staff and at such grades as it may determine.

Amendment No. 138 makes the provisions relating to the appointment of the staff of ReBo consistent with those relating to the appointment of the chief executive of ReBo. Section 54 will now mirror the provisions concerning the appointment of the chief executive set out in section 53. Subsection (2)(a) restates section 54(2) as included in the Bill as published following Committee Stage in the Dáil, and provides that the terms of appointment of the staff of ReBo may be determined by the Minister with the consent of the Minister for Public Expenditure and Reform, subject to the Public Service Management (Recruitment and Appointments) Act 2004. Subsection (2)(b) as provided for in this amendment sets out an alternative means for determining the terms of appointment of ReBo staff. Those terms may be determined by the board of ReBo, subject to the approval of the Minister with the consent of the Minister for Public Expenditure and Reform.

My question also relates to the section as it regards remuneration for board members and their status as employees. Will they be public sector workers, for example? The Minister of State has mentioned public sector pay grades. I do not imagine the Minister of State has details of full staffing levels but with the establishment of NAMA by the previous Government, there were issues, as well as matters relating to pay and pension arrangements in the National Treasury Management Agency, NTMA. I am not suggesting that ReBo will be in that sphere.

What will happen with pension arrangements and are the terms and conditions of the staff contracts exactly the same as other workers in the public sector? The NTMA may be a bad example but when it was at one stage effectively a pseudo-State corporation as it was set up with a defined contribution pension arrangement and the board decided to change it to a defined benefit pension arrangement that required no permission from the Minister for Finance of the time. Against the advice of the Committee of Public Accounts and various Members across the Houses, the agency set its own terms and conditions regarding pay and pensions.

I understand if the Minister of State does not have all the detail to hand but I am flagging this as a potential issue. Perhaps he will tell me it is not an issue and the matter is being dealt with. I would appreciate any comment in that regard.

I will read the speaking note relating to the section and return to the specific issues raised by the Senator. This section provides that ReBo may appoint as many members of staff and at such grades as it deems appropriate. The current text provides that ReBo must obtain the approval of the Minister, given with the consent of the Minister for Public Expenditure and Reform, before taking on staff. However, I intend to bring forward an amendment today which will remove the requirement to obtain the consent of the Minister for Public Expenditure and Reform.

The current text also provides that the appointment of staff is to be on such terms as the Minister determines, with the consent of the Minister for Public Expenditure and Reform, and is subject to the Public Service Management (Recruitment and Appointments) Act 2004. I will bring forward an amendment today to provide for additional, alternative terms of appointment for ReBo staff, determined by the board of ReBo and approved by the Minister with the consent of the Minister for Public Expenditure and Reform. This amendment would make this section consistent with section 53 relating to the appointment of the chief executive of ReBo.

Effectively, these people will be part of the wider public service because of the requirements of the 2004 Act. The Minister for Public Expenditure and Reform is effectively being involved as a triple lock to ensure any agreement will be consistent with an appropriate number of staff and the terms and conditions which go with that. It is fair to say that the establishment of ReBo - we do not yet have anyone and we must have the power to act - is important in operating a new restructured credit union service. We all appreciate the necessity for this restructuring, which must be done on a professional basis. As I understand it, there will be an effective triple lock between the board, the Minister for Finance and the Minister for Public Expenditure and Reform. The terms and conditions will be no different to the terms and conditions pertaining in the Public Service Management (Recruitment and Appointments) Act 2004, which governs recruitment and appointments.

Amendment agreed to.
Government amendment No. 138:
In page 71, lines 38 to 43, to delete subsection (2) and substitute the following:
“(2) An appointment under this section shall either—
(a) be on such terms (including terms as to remuneration, duration of term and allowances for expenses) as the Minister may, with the consent of the Minister for Public Expenditure and Reform, determine and be subject to the Public Service Management (Recruitment and Appointments) Act 2004, or
(b) be on such other terms (including terms as to remuneration, duration of term and allowances for expenses) as may be determined by the Board of ReBo and approved by the Minister with the consent of the Minister for Public Expenditure and Reform.”.
Amendment agreed to.
Section 54, as amended, agreed to.
SECTION 55
Government amendment No. 139:
In page 71, subsection (1), line 44, to delete "with the agreement" and substitute "under the direction".

This amendment provides that the board of ReBo may direct the chief executive to undertake certain functions relating to the accounts of ReBo. This amendment reflects the fact that the board of ReBo and not the chief executive is responsible for keeping the accounts of ReBo and submitting those accounts to the Comptroller and Auditor General. Therefore, it is appropriate for the chief executive to act under the direction of the board of ReBo rather than the agreement of the board.

It is a standard provision.

Amendment agreed to.
Section 55, as amended, agreed to.
Section 56 agreed to.
SECTION 57

Amendment No. 140 is a Government amendment. Amendment Nos. 140 and 171 are related and may be discussed together.

Government amendment No. 140:
In page 73, lines 6 to 9, to delete subsection (1) and substitute the following:
“(1) Disclosure by a credit union to ReBo of information or records does not contravene any duty of confidentiality to which the credit union is subject.
(2) A credit union may disclose to ReBo personal data within the meaning of the Data Protection Acts 1988 and 2003.”.

Amendment No. 140 splits section 57(1) into two subsections to provide greater clarity regarding the effect of disclosure of information by ReBo on any duty of confidentiality or in any obligation under the Data Protection Acts. The proposed section 57(1) provides that a credit union which discloses information to ReBo does not breach any applicable duty of confidentiality and the new section 57(2) which will be created by this amendment sets out that a credit union may disclose to ReBo personal data within the meaning of the Data Protection Acts. This amendment ensures that there is a legal gateway between credit unions and ReBos for the disclosure of information.

Amendment 171 inserts a new paragraph (h) into section 71(2) of the 1997 Act which will allow officers of a credit union to disclose confidential information to the ReBo and facilitates the sharing of information between the credit union and ReBo. ReBo will protect the confidentiality of information shared under section 51 of the Bill.

SECTION 58

Amendment agreed to.
Section 57, as amended, agreed to.
Government amendment No. 141:
In page 73, subsection (2), lines 19 to 21, to delete paragraphs (a) and (b) and substitute the following:
“(a) to provide a source of financial support for the restructuring of credit unions under this Part,
(b) to provide stabilisation support in accordance with Part 4,
(c) to meet the expenses of ReBo in discharging its functions under this Act,
(d) to provide for the costs referred to in section 61(2), and
(e) to provide for the expenses referred to in section 69.”.

This amendment adds a number of purposes for the credit union fund to those listed in section 50(2). This amendment sets out that discharging the expenses of ReBo, the cost of collecting levies due under the Act, and the expenses of the bank in exercising its functions are purposes of the credit union fund. It sets that out in the context of amendment No. 141.

Amendment agreed to.

Amendment No. 142 is a Government amendment. Amendments Nos. 142, 143 and 145 to 147, inclusive, are related and may be discussed together.

Government amendment No. 142:
In page 73, subsection (5), line 34, to delete “restructuring purposes” and substitute “the purposes of restructuring under this Part”.

Amendment No. 142 is a technical amendment to improve the consistency of terminology in this Part of the Bill by removing the references to "restructuring purposes" and replacing it with "for the purposes of restructuring under this Part".

Amendment No. 143 removes the obligation on the Minister to obtain the bank's approval of an amalgamation or transfer of engagement under section 131(6)(a) of the 1997 Act before providing financial support for the purposes of restructuring. This amendment sets out that the provision of such support may be conditional on the bank giving its approval under that section rather than requiring the approval before the support is provided. This will permit the bank to consider the conditions proposed to be attached by the Minister to the provision of support, and the bank can decide accordingly whether to grant approval.

Amendment No. 145 is a technical amendment which updates the cross-referencing to other sections of the Bill dealing with the provisions of restructuring and restabilisation support. Amendment No. 146 clarifies that the support referred to in section 58(7) is stabilisation support. Amendment No. 147 clarifies that the conditions referred to in section 48(7) are those attached by the Minister under section 48(6) to the provision of stabilisation support.

Amendment agreed to.
Government amendment No. 143:
In page 73, subsection (5), lines 34 to 36, to delete all words from and including “The” in line 34 down to and including “Act.” in line 36 and substitute the following:
“The provision of financial support by the Minister may be conditional on the Bank confirming the amalgamation or transfer under section 131(6)(a) of the Principal Act.”.
Amendment agreed to.

Amendment No. 144 is a Government amendment. Amendments Nos. 144 and 163 are related and may be discussed together.

Government amendment No. 144:
In page 73, lines 37 to 40, to delete subsection (6) and substitute the following:
“(6) Where requested by the Bank under section 66(4), the Minister may provide stabilisation support from the Credit Union Fund on such terms and conditions as the Minister considers appropriate. The provision of stabilisation support by the Minister shall be conditional on the Bank approving the provision of stabilisation support under section 66(5).”.

Amendment No. 144 provides that the Minister may provide stabilisation support for a credit union from the credit union fund where requested to do so by the bank. The provision for the Minister to attach terms and conditions to any support provided is retained in this amendment. Those conditions are primarily intended to relate to the recoupment of funds provided as financial support under the Act. Amendment No. 163 clarifies that the bank may request the Minister to provide stabilisation support in accordance with section 58(6).

Government amendment No. 148:

In page 74, subsection (9), line 4, after “of” to insert “financial”.

Amendment agreed to.
Government amendment No. 145:
In page 73, subsection (7), line 41, to delete “subsection (6)” and substitute “subsections (5) and (6)”.
Amendment agreed to.
Government amendment No. 146:
In page 73, subsection (7), line 43, after “the” where it firstly occurs to insert “stabilisation”.
Amendment agreed to.
Government amendment No. 147:
In page 73, subsection (7), line 44, after “but” to insert “conditions under subsection (6)”.
Amendment agreed to.
Amendment agreed to.
Government amendment No. 149:
In page 74, lines 7 to 9, to delete subsection (10).

Amendment No. 149 deletes section 58(10). I am bringing forward an amendment to section 60 which provides the Minister with the power to make regulations prescribing the rate of contribution of credit unions to the credit union fund for the purposes of providing for the provision of stabilisation support under section 58(6). Stabilisation support will be made available out of funds raised through this levy, therefore, the current text in section 58(10) will no longer be required and is deleted by this amendment.

Amendment agreed to.

Amendment agreed to.
Section 58, as amended, agreed to.
SECTION 59
Government amendment No. 150:
In page 74, subsection (1)(a), line 12, after “accounts” to insert “of receipts and payments”.
Section 59, as amended, agreed to.
SECTION 60

Amendment No. 151 is a Government amendment. Amendments Nos. 151 and 155 are related and may be discussed together.

Government amendment No. 151:
In page 74, subsection (2), line 40, to delete “support” and substitute “support,”.

Amendment No. 151 corrects a typographical error. Amendment No. 155 deletes unnecessary wording relating to section 61. Section 61 is a discretionary provision and, therefore, it is not appropriate to provide for an obligation to comply with that provision.

Amendment agreed to.
Government amendment No. 152:
In page 74, between lines 41 and 42, to insert the following subsection:
“(3) The Minister shall make regulations prescribing the rate of contribution, or a method of calculating the rate of contribution, to the Credit Union Fund by a credit union under this section for the purpose of providing funding for the provision of stabilisation support under section 58(6).”.

Amendment No. 152 sets out the Minister's powers to make regulations prescribing the rate of contribution or method of calculating the rate of contribution to the credit union fund by credit unions to provide the credit union fund with sufficient funds for the provision of stabilisation support.

Section 60(2) already provides that the Minister may make regulations prescribing the contribution to be made by credit unions to the credit union fund to recoup the cost of financial support provided for the purposes of restructuring. This amendment will provide a similar power in regard to stabilisation support to be provided from the credit union fund. This gives effect to recommendation 8.5.8 of the commission's report which recommended that the necessary financing of the credit union fund for the purpose of stabilisation be sourced from the credit union sector.

Amendment agreed to.
Government amendment No. 153:
In page 74, subsection (3)(a), lines 46 and 47, to delete “carrying out restructuring activities” and substitute the following:
“providing financial support for the restructuring of credit unions”.
Amendment agreed to.
Government amendment No. 154:
In page 75, subsection (4)(c), line 16, to delete “funding” and substitute “financial support”.
Amendment agreed to.
Government amendment No. 155:
In page 75, subsection (6), lines 26 and 27, to delete all words from and including “be” in line 26 down to and including “and” in line 27.
Amendment agreed to.
Section 60, as amended, agreed to.

I propose an amendment to the Order of Business, to extend the time to 5.45 p.m. in the hope we can complete the debate on Committee Stage.

Section 61 agreed to.
SECTION 62
Government amendment No. 156:
In page 76, to delete lines 2 to 9 and substitute the following:
“ “stabilisation support” means financial support provided under this Act by the Minister from the Credit Union Fund to a credit union for the purpose of restoring and facilitating the maintenance of that credit union’s reserve requirement, and such support by the Minister may include the provision of technical and financial advice and the provision of financial support to the credit union concerned.”.

This amendment changes the definition of "stabilisation support" to clarify that support may include funding unrelated to the reserve requirement. Such funding may be used to update the systems and controls of the credit unions and also may include the provision of financial and technical advice for the credit union. This is a recommendation of the Commission on Credit Unions at paragraph 8.5.6 of the report.

Amendment agreed to.
Section 62, as amended, agreed to.
Sections 63 to 65, inclusive, agreed to.
SECTION 66

Amendments Nos. 157 and 158 are related and will be discussed together.

Government amendment No. 157:
In page 76, lines 37 to 46, to delete subsection (2) and substitute the following:
“(2) Until the commencement of an order under section 43(1), stabilisation support shall not be approved by the Bank for a credit union under subsection (1) unless the Credit Union Restructuring Board has recommended that the credit union be considered by the Bank for stabilisation support.”.

Amendment No. 157 amends subsection (2) by deleting the existing paragraph (b) which states that the bank may only approve stabilisation support if the credit union concerned has a shortfall in reserves caused by a short-term, non-recurring event. Instead, amendment No. 158 sets out when ReBo may recommend to the bank that a credit union should be stabilised. During the period of restructuring a credit union may not be assessed for stabilisation support unless ReBo makes a recommendation to the bank that the credit union should be stabilised. A credit union must not be part of the restructuring proposal or must have reserves greater than 7.5% before ReBo may make this recommendation. This will ensure that the restructuring process and the stabilisation process are aligned. Amendment No. 159 updates the citation of the Central Bank Acts which are amended by Part 5 of this Bill and was already discussed with amendment No. 2 to section 1.

Amendment agreed to.
Government amendment No. 158:
In page 76, after line 46, to insert the following subsection:
“(3) The Credit Union Restructuring Board may only make a recommendation to the Bank in relation to an individual credit union for the purposes of subsection (1) if:
(a) the credit union is not party to a restructuring proposal approved or being considered for approval as part of a restructuring plan under section 45 (5)(a), and
(b) the credit union satisfies the requirements of subsection (1)(a)(i).”.
Amendment agreed to.
Government amendment No. 159:
In page 77, subsection (3)(a), lines 8 and 9, to delete “Central Bank Acts 1942 to 2011” and substitute “Central Bank Acts 1942 to 2012”.
Amendment agreed to.

Amendments Nos. 160 and 161 are related and will be discussed together.

Government amendment No. 160:
In page 77, subsection (3)(c), line 19, to delete “support” and substitute “such stabilisation support”.

Amendments Nos. 160 and 161 are minor technical amendments. Amendment No. 160 clarifies that the support referred to in paragraph (c) is stabilisation support as opposed to restructuring support. We have already discussed those amendments as part of another group. Amendment No. 161 changes the reference from "this Part" to "this Act" as stabilisation support is to be provided by the Minster under Part 3 rather than Part 4.

Amendment agreed to.
Government amendment No. 161:
In page 77, subsection (3)(c), line 20, to delete “this Part;” and substitute “this Act;”.
Amendment agreed to.
Government amendment No. 162:
In page 77, subsection (3)(g), line 33, to delete “functions.” and substitute the following:
“functions;
(h) such terms and conditions as the Minister considers appropriate to attach to the stabilisation support.”.

Amendment No. 162 clarifies that the bank must have regard to the terms and conditions that the Minister considers appropriate to attach the decision to provide stabilisation support when making a decision on the approval of stabilisation support to a credit union. These terms and conditions will deal with issues such as recoupment which may affect the Central Bank’s assessment of viability.

Amendment agreed to.
Government amendment No. 163:
In page 77, subsection (4), line 35, after “may” to insert the following:
“request the provision of stabilisation support by the Minister under section 58(6) and may”.
Amendment agreed to.
Section 66, as amended, agreed to.
Section 67 deleted.
Sections 68 and 69 agreed to.
NEW SECTIONS
Government amendment No. 164:
In page 80, before the Schedule, to insert the following new section:
“PART 5#
MISCELLANEOUS AMENDMENTS RELATING TO CENTRAL BANK ACTS 1942 TO 2011
70.—(1) Section 33AK of the Central Bank Act 1942 is amended—
(a) by substituting “subsection (1A)” for “subsection (1)(b)” in each place, and
(b) in subsection (3) by substituting the following for paragraph (b):
(b) Paragraph (a) does not apply—
(i) where the Bank is satisfied that the supervised entity has already reported the information concerned to the relevant body, or
(ii) where the information concerned has come into the possession of, or to the knowledge of the Bank, from an authority, in a jurisdiction other than that of the State, duly authorised to exercise functions similar to any one or more of the statutory functions of the Bank.”.
(2) Schedule 2 to the Central Bank Act 1942 is amended in Part 1 by substituting the following for item 38:
"
Amendment agreed to.
Government amendment No. 165:
In page 80, before the Schedule, to insert the following new section:
71.—The Central Bank Reform Act 2010 is amended—
(a) in section 3 by inserting the following definitions:
" ‘authorised officer’ means a person appointed by the Bank under Part 5 to be an authorised officer;
‘financial services legislation’ means—
(a) the designated enactments,
(b) the designated statutory instruments, and
(c) the Central Bank Acts 1942 to 2012 and statutory instruments made under those Acts;”,
and
(b) by inserting the following after section 53:
OVERSEAS REGULATORS
54.— (1) In this section ‘overseas regulator’ means an authority in a jurisdiction other than that of the State duly authorised to perform functions similar to any one or more of the statutory functions of the Bank.
(2) At the request of an overseas regulator to do so in relation to any matter, the Bank may –
(3) In deciding whether or not to exercise any of its powers under subsection (2), the Bank may take into account in particular:
(a) whether in the country or territory of the overseas regulator, corresponding assistance would be given to an authority duly authorised in the State to perform functions corresponding to functions exercised by the overseas regulator;
(b) whether the case concerns the breach of a law, or other requirement, which has no close parallel in the State or involves the assertion of a jurisdiction not recognised by the State;
(c) the seriousness of the case and its importance to persons in the State;
(d) whether it is otherwise appropriate in the public interest to give the assistance sought.
(4) The Bank may decide that it will not exercise any of its powers under subsection (2) unless the overseas regulator undertakes to make such contribution towards the cost of such exercise as the Bank considers appropriate.
(5) Subsections (3) and (4) do not apply if the Bank considers that the exercise of its power is necessary to comply with any obligation created or arising by or under the Treaties governing the European Union.
(6) If the Bank authorises an authorised officer for the purposes of subsection (2)(b), the Bank may direct the authorised officer to permit a representative of the overseas regulator to attend, and take part in, any interview conducted for the purposes of the investigation of the matter concerned.
(7) A direction under subsection (6) is not to be given unless the Bank is satisfied that any information obtained by an overseas regulator as a result of the interview will be subject to obligations of non-disclosure of information similar to those imposed on the Bank in section 33AK of the Act of 1942.
(8) A person shall not be required for the purposes of the exercise of any power under this section to answer any question tending to incriminate the person.
PART 5
55—(1) In this Part –
‘agent’, in relation to a person to whom this Part applies, includes a past as well as a present agent and includes the person’s banker, accountant, solicitor, auditor and financial or other adviser, whether or not a person to whom this Part applies;
‘authorisation’ means an authorisation, licence or any other permission required to carry on business as a regulated financial service provider granted by the Bank pursuant to any provision of financial services legislation, and includes registration;
‘customer’, in relation to a regulated financial service provider, means–
(a) any person to whom the regulated financial service provider provides or offers financial services, or
(b) any person who requests the provision of financial services from the regulated financial service provider,
and includes a potential customer and a former customer;
‘person to whom this Part applies’ shall be read in accordance with section 56;
‘prescribed contravention’ has the same meaning as in section 33AN of the Act of 1942;
‘premises’ includes vessel, aircraft, vehicle and any other means of transport, as well as land and a building and any other fixed or moveable structure;
‘regulated market’ has the same meaning as in Regulation 3 of the European Communities (Markets in Financial Instruments) Regulations 2007 (S.I. No 60 of 2007);
‘related undertaking’, in relation to a person (‘the first-mentioned person’), means—
(a) if the first-mentioned person is a company, another company that is related within the meaning of section 140(5) of the Companies Act 1990,
(b) a partnership of which the first-mentioned person is a member,
(c) if the businesses of the first-mentioned person and another person have been so carried on that the separate business of each of them, or a substantial part thereof, is not readily identifiable, that other person,
(d) if the decision as to how and by whom the businesses of the first-mentioned person and another person shall be managed can be made either by the same person or by the same group of persons acting in concert, that other person,
(e) a person who performs a specific and limited purpose by or in connection with the business of the first-mentioned person, or
(f) if provision is required to be made for the first-mentioned person and another person in any consolidated accounts compiled in accordance with Seventh Council Directive 83/349/EEC of 13 June 1983 OJ L 193, 18.7.1983, p.1, that other person.
(2) References in this Part to a regulated financial service provider, or a related undertaking, shall, unless the context otherwise requires, be read as including a person who was a regulated financial service provider, or a related undertaking, at the relevant time.
56.—(1) The following are persons to whom this Part applies (including persons outside the State):
(a) a regulated financial service provider;
(b) a person who has applied for an authorisation but whose application has not been determined;
(c) a person whom the Bank reasonably believes is or was a regulated financial service provider, or is or was acting as or claiming or holding himself or herself out to be a regulated financial service provider;
(d) a person who is or was, or whom the Bank reasonably believes, is or was, without an authorisation, providing a financial service in respect of which an authorisation is required;
(e) a related undertaking of any of the persons referred to in paragraph (a), (b), (c) or (d);
(f) any other person whom the Bank reasonably believes may possess information about a person referred to in paragraph (a), (b), (c), (d) or (e);
(g) any person whom the Bank reasonably believes may possess information about a financial product or investment admitted to trading or which is to be admitted to trading under the rules and systems of a regulated market.
(2) The duty imposed by this Part to produce or provide any information, extends to-
(a) a person who is in relation to a person to whom this Part applies –
and
(b) a person who –
57.—(1) For the purposes of obtaining any information necessary for the performance by the Bank of its functions under financial services legislation relating to the proper and effective regulation of financial service providers, the Bank may appoint any of its officers or employees or other suitably qualified persons to be authorised officers and to exercise any of the powers conferred by this Part.
(2) The Bank may revoke any appointment made by it under subsection (1).
(3) An appointment or revocation under this section shall be in writing.
(4) A person's appointment by the Bank as an authorised officer ceases on the earlier of –
(a) the revocation by the Bank of the appointment,
(b) in a case where the appointment is for a specified period, the expiration of the period,
(c) on the person's resignation from the appointment, and
(d) in the case where the person is an officer or employee of the Bank –
(5) In this section ‘suitably qualified person’ means any person (other than an officer or employee of the Bank) who, in the opinion of the Bank, has the qualifications and experience necessary to exercise the powers conferred on an authorised officer by this Part.
58.—Every authorised officer appointed by the Bank shall be furnished with a warrant of his or her appointment, and when exercising a power conferred by this Part shall produce such warrant or a copy of it, together with a form of personal identification, for inspection if requested to do so by a person affected by the exercise of the power.
59.—(1) Subject to subsection (2), an authorised officer may at all reasonable times enter any premises–
(a) which the authorised officer has reasonable grounds to believe are or have been used for, or in relation to, the business of a person to whom this Part applies, or
(b) at, on or in which the authorised officer has reasonable grounds to believe that records relating to the business of a person to whom this Part applies are kept.
(2) An authorised officer shall not enter a dwelling, otherwise than –
(a) with the consent of the occupier, or
(b) pursuant to a warrant under section 61.
60—(1) An authorised officer may do any one or more of the following:
(a) search and inspect premises entered under section 59 or pursuant to a warrant under section 61;
(b) require any person to whom this Part applies who apparently has control of, or access to, records, to produce the records;
(c) inspect records so produced or found in the course of searching and inspecting premises;
(d) take copies of or extracts from records so produced or found;
(e) subject to subsection (3), take and retain records so produced or found for the period reasonably required for further examination;
(f) secure, for later inspection, any records produced or found and any data equipment, including any computer, in which those records may be held;
(g) secure, for later inspection, premises entered under section 59or pursuant to a warrant under section 61, or any part of such premises, for such period as may reasonably be necessary for the purposes of the exercise of his or her powers under this Part, but only if the authorised officer considers it necessary to do so in order to preserve for inspection records that he or she reasonably believes may be kept there;
(h) require any person to whom this Part applies to answer questions and to make a declaration of the truth of the answers to those questions;
(i) require any person to whom this Part applies to provide an explanation of a decision, course of action, system or practice or the nature or content of any records;
(j) require a person to whom this Part applies to provide a report on any matter about which the authorised officer reasonably believes the person has relevant information;
(k) require that any information given to an authorised officer under this Part is to be certified as accurate and complete by such person or persons and in such manner as the Bank or the authorised officer may require.
(2) Where records are not in legible form, an authorised officer, in the exercise of any of his or her powers under this Part, may—
(a) operate any data equipment, including any computer, at the premises which is being searched or cause any such data equipment or computer to be operated by a person accompanying the authorised officer, and
(b) require any person who appears to the authorised officer to be in a position to facilitate access to the records stored in any data equipment or computer or which can be accessed by the use of that data equipment or computer to give the authorised officer all reasonable assistance in relation to the operation of the data equipment or computer or access to the records stored in it including—
(3) Where the Bank or an authorised officer proposes to retain, pursuant to this section, any records taken by the authorised officer under subsection (1) for a period longer than 14 days after the date on which the records are taken, the Bank or the authorised officer shall, before the end of that period of 14 days, or such longer period with the consent of the person hereafter mentioned, furnish, on request, a copy of the records to the person who it appears to the Bank or the authorised officer, but for the exercise of the powers under this section, is entitled to possession of it.
(4) A person to whom this Part applies shall give to an authorised officer such assistance as the authorised officer may reasonably require and make available to the authorised officer such reasonable facilities as are necessary for the authorised officer to exercise his or her powers under this Part including such facilities for inspecting and taking copies of any records as the authorised officer reasonably requires.
(5) Subject to any warrant issued section 61, an authorised officer may be accompanied, and assisted in the exercise of the officer’s powers under this Part, by such other authorised officers, members of the Garda Síochána or other persons as the authorised officer reasonably considers appropriate.
61.—(1) Without prejudice to the powers conferred on an authorised officer by or under any other provision of this Part, if a judge of the District Court is satisfied on the sworn information of the authorised officer that there are reasonable grounds for believing that records are to be found on, at or in any premises, the judge may issue a warrant authorising an authorised officer accompanied by such other authorised officers or members or the Garda Síochána as may be necessary, at any time or times, within the period of validity of the warrant, on production, if so requested, of the warrant—
(a) to enter the premises specified in the warrant, if need be by reasonable force, and
(b) to exercise the powers conferred on authorised officers by this Part or such of those powers as are specified in the warrant.
(2) The period of validity of a warrant shall be 28 days from its date of issue.
(3) An application for a warrant under this section shall be made to a judge of the District Court in the district court district in which the premises concerned are situate.
62—(1) An authorised officer may attend any meeting relating to the business of a regulated financial service provider if the authorised officer considers that it is necessary to attend in order to assist the Bank in the performance of any of its functions under financial services legislation.
(2) The attendance of an authorised officer pursuant to subsection (1) at a meeting referred to in that subsection does not in any circumstances limit the powers of the authorised officer or of the Bank.
63—Nothing in this Part shall operate to confer any right to production of, or access to, any record subject to legal professional privilege.
64.—(1) The disclosure or production of any record or other information by a person under this Part shall not be treated, for any purpose, as a breach of any restriction under any enactment or rule of law on disclosure or production by the person or any other person on whose behalf the record or other information is disclosed or produced.
(2) Where a person from whom production of a record is required under this Part claims a lien on the record, the production of it shall be without prejudice to the lien.
65.— (1) If any person to whom this Part applies fails or refuses to comply with a requirement under this Part the authorised officer may certify the failure or refusal under his or her hand to the High Court.
(2) When an authorised officer certifies a failure or refusal referred to in subsection (1) to the High Court, the High Court may inquire into the case and may make such order (including interim or interlocutory orders) or direction as the High Court thinks fit, after hearing -
66—(1) A person commits an offence if he or she —
(2) A person who commits an offence under this section is liable –
(3) A person does not commit an offence of failing to comply with a requirement referred to in subsection (1)(b) unless, when the requirement was made, the person was warned that a failure to comply is an offence.
(4) If a person refuses to answer a question asked of him or her or to comply with any other requirement made, under this Part, on the grounds that the answer or compliance with the requirement might tend to incriminate the person and the person is informed of his or her obligation to answer the question or to comply with the requirement, the person shall not refuse to answer the question or to comply with the requirement but the answer given or information provided on that occasion shall not be admissible as evidence in criminal proceedings against the person other than proceedings against him or her under this section.”.
Amendment agreed to.
Government amendment No. 166:
In page 80, before the Schedule, to insert the following new section:
72.—(1) The Acts specified in Part 1 of Schedule 2 are amended to the extent specified in that Part.
(2) The statutory instruments specified in Part 2 of Schedule 2 are amended to the extent specified in that Part.
(3) The Central Bank Acts 1942 to 2011 specified in Parts 1 to 3 of Schedule 3 are amended to the extent specified in each such Part.
(4) The Acts specified in Parts 1 to 8 of Schedule 4 are amended to the extent specified in each such Part.
(5) The statutory instruments specified in Parts 1 to 7 of Schedule 5 are amended to the extent specified in each such Part.
(6) A person who was an authorised officer, by whatever name called, appointed under the provisions of any enactment repealed or revoked by this Act immediately before the coming into operation of the repeal or revocation concerned is taken to have been appointed under Part 5 of the Central Bank Reform Act 2010.
(7) Anything done by a person who was an authorised officer, by whatever name called, appointed under the provisions of any enactment repealed or revoked by this Act immediately before the coming into operation of the repeal or revocation concerned shall be treated after the coming into operation of the repeal or revocation as done under Part 5 of the Central Bank Reform Act 2010 by an authorised officer appointed under Part 5 of the Central Bank Reform Act 2010.
(8) Any information gathered, or any other thing done, under the provisions of any enactment repealed or revoked by this Act is to be treated after the coming into operation of the repeal or revocation as if done under any provision of Part 5 of the Central Bank Reform Act 2010 under which it could have been done had the provision been in force at the time in question.”.
Amendment agreed to.
SCHEDULE

Amendments Nos. 167 and 173 are related and will be discussed together.

Government amendment No. 167:
In page 83, item 22, lines 13 and 14, to delete “section 37C” and substitute “sections 37C and 37D”.

Amendment No. 167 is a minor amendment and inserts a reference to section 37D of the Credit Union Act 1997 which sets out the information to be included in the credit agreement notice to the credit union member. This item in the schedule is required to ensure there is consistency between the Credit Union Act 1997 and the Consumer Credit Regulations 2010, which apply to credit unions. Amendment No. 173 clarifies that the supervisory authority referred to in item 100 is the Irish Auditing and Accounting Supervisory Authority

Amendment agreed to.
Government amendment No. 168:
In page 84, item 37, to delete lines 22 to 26 and substitute the following:
“(b) which are being prescribed for the purposes of this section as being services of a description that appears to the Bank to be of mutual benefit to its members,”.

Under the current wording the Central Bank may exempt certain additional services which involve no undue risk to the credit union. This amendment removes the reference to "undue risk" in respect of additional services that the bank may exempt from the application requirements under section 48 of the Credit Union Act 1997. The wording may be too restrictive and limit the instances where the bank can exempt certain services from the additional requirements provided in that section. Instead, the bank may exempt such services which may be for the mutual benefit of its members.

59

Section 71(2)

Substitute for paragraph (g)

“(g) which is made to the Bank for the purposes of its functions in relation to credit unions; or

(h) which is made to the Credit Union Restructuring Board for the purposes of its functions under the Credit Union Act 2012.”.

Amendment agreed to.
Government amendment No. 169:
In page 85, item 44, line 19, to delete “section 53(17)” and substitute “section 53(15)”.
Amendment agreed to.
Government amendment No. 170:
In page 85, item 46, line 31, to delete “section 53(19)” and substitute “section 53(17)”.
Amendment agreed to.
Government amendment No. 171:
In page 86, between lines 53 and 54 to insert the following:
Amendment agreed to.
Government amendment No. 172:
In page 88, between lines 36 and 37, to insert the following:

80

Section 87(2)(c)

Substitute:

“(c) that, since the registration of the credit union, the factors taken into account in granting registration have so changed that, if the society were now applying for registration, it would be refused; or

(d) that the credit union has failed to comply with any terms and conditions imposed by the Bank under section 66(5) of the Credit Union Act 2012 relating to the provision of stabilisation support under this Act.”

.”.

This amendment inserts a new paragraph (d) into section 87(2) of the 1997 Act which allows the Central Bank to impose a regulatory direction on a credit union under section 87 where that credit union fails to comply with the terms and conditions of any stabilisation support given to the credit union under the Bill. If it does not comply with terms and conditions after funding has been provided, this gives the Central Bank the power to act. This is necessary to ensure that conditions imposed in return for financial support to keep the credit union afloat are enforceable. It is a little like the powers of the troika being imposed on us. We are now giving the powers to the Central Bank for the purposes of ensuring that, if it gives out money, the terms and conditions are adhered to.

This direction, the credit unions will be glad to hear, will be appealable to the Irish Financial Services Appeals Tribunal under section 52 of the 1997 Act.

Amendment agreed to.
Government amendment No. 173:
In page 90, item 100, line 43, to delete "Supervisory Authority" and substitute "Irish Auditing and Accounting Supervisory Authority".
Amendment agreed to.
Government amendment No. 174:
In page 93, between lines 16 and 17 to insert the following:
"

134

Section 182(1)(k)

Delete.

135

section 182(1)(m)

Delete.

".

This amendment removes the ministerial regulation-making powers under section 182 of the 1997 Act, as these powers conflict with the bank's regulation-making powers under the Bill and are more appropriate for the Central Bank. These relate to the registration procedures and operations of credit unions.

NEW SCHEDULES

Government amendment No. 176:

In page 93, after line 49, to insert the following new Schedule:

"SCHEDULE 2

AMENDMENTS TO CERTAIN ACTS AND STATUTORY INSTRUMENTS

PART 1

AMENDMENTS TO CERTAIN ACTS

Item

(1)

Number and year

(2)

Short title

(3)

Extent of repeal

(4)

1

No. 24 of 1971

Central Bank Act 1971

Section 17A

2

No. 3 of 1989

Insurance Act 1989

Sections 59 and 60

3

No. 17 of 1989

Building Societies Act 1989

Section 41

4

No. 21 of 1989

Trustee Savings Banks Act 1989

Section 24A

5

No. 24 of 1994

Investment Limited Partnerships Act 1994

Section 25(2)

6

No. 11 of 1995

Investment Intermediaries Act 1995

Sections 9(3), 64 and 65

7

No. 8 of 1997

Central Bank Act 1997

Sections 36G, 36H, 36I, 75 and 76

8

No. 47 of 2001

Asset Covered Securities Act 2001

Section 70

PART 2

AMENDMENTS TO CERTAIN STATUTORY INSTRUMENTS

Item

(1)

Number and year

(2)

Citation

(3)

Extent of revocation

(4)

1

S.I. No. 13 of 2005

European Communities (Insurance Mediation) Regulations 2005

Regulations 28, 29, 30 and 31

2

S.I. No. 380 of 2006

European Communities (Reinsurance) Regulations 2006

Regulations 72, 73, 74 and 75

3

S.I. No. 60 of 2007

European Communities (Markets in Financial Instruments) Regulations 2007

Regulations 163, 164 and 165

4

S.I. No. 383 of 2009

European Communities (Payment Services) Regulations 2009

Regulations 99, 100, 101, 102 and 110

5

S.I. No. 183 of 2010

European Communities (Cross Border Payments) Regulations 2010

Regulations 6, 7, 8, 9, 10, 11 and 12

6

S.I. No. 183 of 2011

European Communities (Electronic Money) Regulations 2011

Regulations 62, 63, 64, 65 and 72

".

Amendment agreed to.

Government amendment No. 177:

In page 93, after line 49, to insert the following new Schedule:

“SCHEDULE 3

AMENDMENTS OF CENTRAL BANK ACTS

PART 1

AMENDMENTS OF CENTRAL BANK ACT 1971

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 2(1)

In paragraph (d) of the definition of “related body” delete “section 17A” and substitute “Part 5 of the Central Bank Reform Act 2010”.

2

Section 58(1)

Delete “17A,”.

PART 2

AMENDMENTS OF CENTRAL BANK ACT 1997

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 28

(a) Substitute the following for the definition of “authorisation”:

“ ‘authorisation’ means an authorisation under this Part authorising a person to carry on a regulated business;”.

(b) Delete the definition of “inspector”.

(c) In the definition of “retail credit firm”—

(i) substitute “paragraph (e)” for “paragraph (g)”, and

(ii) substitute “section 2(1)” for “section 3”.

2

Section 32A(5)(b)

After “officer” insert “appointed under “Part 5 of the Central Bank Reform Act 2010”.

".

Amendment agreed to.

Government amendment No. 178:

In page 93, after line 49, to insert the following new Schedule:

“SCHEDULE 4

AMENDMENTS OF CERTAIN OTHER ACTS

PART 1

AMENDMENTS OF BUILDING SOCIETIES ACT 1989

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 119(1)(a)

(a) In subparagraph (v) substitute “section 41A” for “sections 41 or 41A”.

(b) Delete subparagraph (vii).

PART 2

AMENDMENT OF TRUSTEE SAVINGS BANKS ACT 1989

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 62(1)

Delete “24A,”.

PART 3

AMENDMENT OF INVESTMENT LIMITED PARTNERSHIPS ACT 1994

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 25(4)

In paragraph (a) delete the definition of “appropriate person”.

PART 4

AMENDMENTS OF CONSUMER CREDIT ACT 1995

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 8G(1)

(a) In the definition of “authorised officer” substitute “8M” for “8L”.

(b) Delete the definition of “responsible authority”.

2

Section 8M

(a) In subsection (1) substitute “The Minister” for “A responsible authority”.

(b) In subsection (3) substitute “The Minister” for “A responsible authority”.

(c) In subsection (5)—

(i) in paragraph (a) substitute “the Minister” for “the responsible authority concerned”, and

(ii) in paragraph (c) substitute “the Minister” for “the responsible authority”.

PART 5

AMENDMENTS OF INVESTMENT INTERMEDIARIES ACT 1995

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 2(1)

Substitute the following for the definition of “authorised officer”:

“ ‘authorised officer’ means a person appointed to be an authorised officer under Part 5 of the Central Bank Reform Act 2010;”.

2

Section 20(6)

Substitute “section 19 of this Act and Part 5 of the Central Bank Reform Act 2010” for “sections 19 and 65 of this Act”.

3

Section 79(1)

Substitute “21(10)” for “21(9)”.

PART 6

AMENDMENTS OF CREDIT UNION ACT 1997

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 90

Substitute the following for section 90:

“90.—(1) In this section and section 91 ‘authorised officer’ means an authorised officer appointed under Part 5 of the Central Bank Reform Act 2010.

(2) The Bank may appoint an authorised officer to carry out an inspection and to provide a report of the inspection to the Bank.

(3) An authorised officer may, for the purposes of carrying out an inspection, exercise any of the powers conferred on an authorised officer under Part 5 of the Central Bank Reform Act 2010.”.

2

Section 91

(a) Substitute the following for subsections (1) and (2):

“(1) If required to do so by notice in writing served by the Bank at any time—

(a) a credit union,

(b) any person who is or has been an officer, member, agent or liquidator of a credit union, and

(c) any other person who has in his or her possession or power any books or documents relating to a credit union, shall furnish to the Bank such books or documents which relate to the credit union and are in his possession or power and such information relating to the business of the credit union as may be specified in the notice and as may be reasonably required by the Bank in the exercise of its powers under this Act.

(2) If required to do so by a notice in writing served on it by the Bank, a credit union shall furnish to the Bank a financial statement or periodic financial statements in such form and containing such information as may be specified in the notice and as may be reasonably required by the Bank in the exercise of the powers of the Bank under this Act.”.

(b) Substitute the following for subsection (4):

“(4) The Bank may take copies of or extracts from any item produced in compliance with a notice under subsection (1) or (2) and, if so required by the Bank, the person on whom a notice under subsection (1) was served or, in the case of a statement produced in compliance with a notice under subsection (2), a person who is or has been an officer, member, agent or liquidator of the credit union shall provide any explanation which may reasonably be required of an item so produced.”.

PART 7

AMENDMENTS OF INVESTOR COMPENSATION ACT 1998

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 9

Substitute the following for section 9:

“(1) In this section ‘Act of 2010’ means the Central Bank Reform Act 2010.

(2) Where the supervisory authority forms the view that an insurance intermediary may be unable to repay money belonging to a client of the insurance intermediary, the supervisory authority may appoint an authorised officer under Part 5 of the Act of 2010 to investigate whether the insurance intermediary is unable to repay money or otherwise discharge its obligations towards clients of the insurance intermediary and to make a report to the supervisory authority in respect of the insurance intermediary.

(3) In relation to investment firms, an inspector appointed under the European Communities (Markets in Financial Instruments) Regulations 2007 (S.I. No 60 of 2007) shall, for the purposes of this section, have the powers conferred on an authorised officer appointed under Part 5 of the Act of 2010.

(4) In relation to investment firms which are credit institutions, an inspector appointed under section 45 of the Building Societies Act 1989 shall, for the purposes of this section, have the powers conferred on an authorised officer appointed under Part 5 of the Act of 2010.

(5) In relation to investment firms which are investment business firms, an inspector appointed under section 66 or 73 of the Investment Intermediaries Act 1995 shall, for the purposes of this section, have the powers conferred on an authorised officer appointed under Part 5 of the Act of 2010.”.

2

Section 33(2)

(a) Substitute “Part 5 of the Central Bank Reform Act 2010” for “the Act of 1995 and the European Communities (Markets in Financial Instruments) Regulations 2007”.

(b) Substitute “Part of that Act” for “Act and those Regulations”.

PART 8

AMENDMENT OF ASSET COVERED SECURITIES ACT 2001

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 98

In paragraph (a) delete “or any person authorised by it to perform the relevant function on its behalf,”.

".

Amendment agreed to.

Government amendment No. 179:

In page 93, after line 49, to insert the following new Schedule:

“SCHEDULE 5

AMENDMENTS TO CERTAIN STATUTORY INSTRUMENTS

PART 1

AMENDMENTS OF EUROPEAN COMMUNITIES (DISTANCE MARKETING OF CONSUMER FINANCIAL SERVICES) REGULATIONS 2004

(S.I. No. 853 of 2004)

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Regulation 25

In paragraph (1) substitute “competent authority (other than the Bank)” for “competent authority”.

2

Regulation 26

In paragraph (1) substitute “competent authority (other than the Bank)” for “competent authority”.

PART 2

AMENDMENT OF EUROPEAN COMMUNITIES (INSURANCE MEDIATION) REGULATIONS 2005

(S.I. No. 13 of 2005)

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Regulation 3(1)

Delete the definition of “authorised officer”.

PART 3

AMENDMENT OF EUROPEAN COMMUNITIES (REINSURANCE) REGULATIONS 2006

(S.I. No. 380 of 2006)

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Regulation 3(1)

Delete the definition of “authorised officer”.

PART 4

AMENDMENTS OF EUROPEAN COMMUNITIES (MARKETS IN FINANCIAL INSTRUMENTS) REGULATIONS 2007

(S.I. No. 60 of 2007)

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Regulation 3(1)

Substitute the following for the definition of “authorised officer”:

“ ‘authorised officer’ means an authorised officer appointed under Part 5 of the Central Bank Reform Act 2010”.

2

Regulation 6(7)

Substitute “Part 5 of the Central Bank Reform Act 2010” for “Regulation 164”.

3

Regulation 14(1)

In subparagraph (b) insert “appointed under Part 5 of the Central Bank Reform Act 2010” after “authorised officer”.

4

Regulation 147(1)(g)(ii)

Substitute “Part 5 of the Central Bank Reform Act 2010” for “Regulation 164”.

5

Regulation 174(1)

Delete “an authorised officer or”.

PART 5

AMENDMENTS OF EUROPEAN COMMUNITIES (INSURANCE AND REINSURANCE GROUPS SUPPLEMENTARY SUPERVISION) REGULATIONS 2007

(S.I. No. 366 of 2007)

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Regulation 3(1)

Substitute the following for the definition of “authorised officer”:

“ ‘authorised officer’ means an authorised officer appointed under Part 5 of the Central Bank Reform Act 2010;”.

2

Regulation 9

(a) Substitute the following for paragraph (5):

“(5) If, in a particular case, the Bank wishes to verify information concerning an insurer or reinsurer located in another Member State and the insurer or reinsurer is an associate of an insurer or reinsurer that both holds an authorisation issued by the Bank and is subject to supplementary supervision, the Bank shall request the competent authority of that other Member State to have that verification carried out by that authority or an officer appointed by it.”.

(b) In paragraph (7) insert “under Part 5 of the Central Bank Reform Act 2010” after “authorised officer”.

PART 6

AMENDMENTS OF EUROPEAN COMMUNITIES (CREDIT INSTITUTIONS)(CONSOLIDATED SUPERVISION) REGULATIONS 2009

(S.I. No. 475 of 2009)

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Regulation 20

Substitute the following for Regulation 20:

“20. (1) Section 18 of the Central Bank Act 1971 (No. 24 of 1971) applies to and in relation to a credit institution that is subject to consolidated supervision by the Bank as if—

(a) references in that section to a holder of a licence under that Act were references to the credit institution, and

(b) references in that section to a related body of a holder of such a licence were references to an associated enterprise of the credit institution.

(2) Section 41A of the Building Societies Act 1989 (No. 17 of 1989) applies to and in relation to a building society that is subject to consolidated supervision by the Bank as if references in that section to a related body of a building society were references to an associated body of the building society.

(3) Section 25 of the Trustee Savings Bank Act 1989 (No. 21 of 1989) applies to and in relation to a credit institution that is subject to consolidated supervision by the Bank as if references in that section to a trustee savings bank were references to the credit institution.”.

PART 7

AMENDMENT OF EUROPEAN COMMUNITIES (CROSS BORDER PAYMENTS) REGULATIONS 2010

(S.I. No. 183 of 2010)

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Regulation 2(1)

Delete the definitions of “relevant records” and “search warrant”.

".

Amendment agreed to.

TITLE

Government amendment No. 180:

In page 5, lines 21 to 24, to delete all words from and including "TO" in line 21 down to and including "MATTERS" in line 24 and substitute the following:

"TO PROVIDE FOR MISCELLANEOUS MATTERS RELATING TO CREDIT UNIONS; TO AMEND THE CENTRAL BANK ACTS 1942 TO 2011, TO PROVIDE FOR CO-OPERATION BETWEEN THE CENTRAL BANK OF IRELAND AND OVERSEAS REGULATORS AND TO PROVIDE FOR THE APPOINTMENT OF AUTHORISED OFFICERS BY THE CENTRAL BANK OF IRELAND; AND TO PROVIDE FOR MATTERS RELATED TO THE FOREGOING".

Amendment agreed to.
Government amendment No. 175:
In page 93, between lines 45 and 46, to insert the following:
"

140

First Schedule

Insert after paragraph 13:

"14. Provision for dealing with directors and members of the board oversight committee who are more than 90 consecutive days in arrears under a debt obligation to the credit union up to and including the suspension or removal from the board of such directors.".

".
Amendment agreed to.
Schedule, as amended, agreed to.
Amendment agreed to.
Bill reported with amendments.

When is it proposed to take Report Stage?

On Thursday next.

Report Stage ordered for Thursday, 13 December 2012.

I welcome visitors from the credit union movement, Mr. Noel Madden, manager of Ballinasloe Credit Union, and Mr. Purcell of the Irish League of Credit Unions.

Sitting suspended at 5.45 p.m. and resumed at 6.10 p.m.