Dáil Éireann díospóireacht -
Wednesday, 4 May 1966

Vol. 222 No. 7

Credit Union Bill, 1966: Report and Final Stages.

Bill recommitted in respect of amendment No. 1.

Parliamentary Secretary to the Minister for Industry and Commerce (Mr. S. Flanagan)

I move amendment No. 1:

1. In page 4, to delete lines 4 to 16, and substitute:

"2 (1) (a) Notwithstanding anything in the Industrial and Provident Societies Acts, 1893 to 1936, a society which may be registered under those Acts shall include a co-operative society which consists of persons each of whom has, in relation to all the other members of the society, not less than one of the common bonds set out in paragraph (b) of this subsection, and is formed for the following objects—

(i) the promotion of thrift among its members by the accumulation of their savings,

(ii) the creation of sources of credit for the benefit of its members at a fair and reasonable rate of interest, and

(iii) the use and control of members' savings for their mutual benefit.

(b) The common bonds referred to in paragraph (a) of this subsection are—

(i) the common bond of association (other than for the purpose of forming or conducting a credit union);

(ii) the common bond of occupation;

(iii) the common bond of residence or employment within a particular locality;

(iv) the common bond of employment by a common employer;

(v) the common bond of membership of a bona fide organisation.

(c) The registrar may, at his discretion, register as a credit union a society the rules of which require a common bond or common bonds among its members of a nature not provided for in paragraph (b) of this subsection."

This is mainly a drafting amendment. It is considered desirable to ensure that the text of the Bill should not even appear to be at variance with the principle that the common bond must exist between each member and all other members.

As regards paragraph (b) (i), the words "other than for the purpose of forming or conducting a credit union" are being introduced now for the first time. Their object is to ensure that the mere getting together of people for the purpose of forming a credit union cannot be put forward as a "common bond of association"; there must also exist some other common interest or involvement between the people concerned.

Amendment agreed to.

Amendment reported and agreed to.

Mr. S. Flanagan

I move amendment No. 2:

In page 5, between lines 28 and 29, to insert the following new subsection:

"(4) Notwithstanding any other provision of this Act, any person other than a natural person, the majority of the members of which are, and continue to be, eligible for membership of a credit union may be admitted to and retain membership of that credit union with the same rights and obligations as a natural person."

Again this is largely a matter of clarification. The Bill already recognises, in section 20 and elsewhere, that persons other than natural persons may be admitted to membership of a credit union. Clubs, associations or societies, based within the field of membership, would normally come to mind in this connection. It is very desirable, for example, that in the case of a parishcredit union, the local football club should be permitted to become a member. Difficulties could, however, arise in showing that the club or other body in question has the common bond of residence, occupation, employment, or whatever it may be. The effect of the amendment is to substitute, in lieu of the provision relating to the common bond, the requirement that the body which it is desired to admit to membership consists substantially of persons who in themselves are eligible for membership.

Amendment agreed to.

Mr. S. Flanagan

I move amendment No. 3:

In page 14, to delete lines 14 to 17, and substitute:

"(3) The quorum for the annual general meeting shall be ten per cent of the members of the credit union or fifteen members, whichever is the lesser number, provided that—

(a) in no case shall the quorum for an annual general meeting be less than five members, and

(b) the quorum for an adjourned annual general meeting may be less than that required by the preceding provisions of this subsection if the rules so provide."

This involves only a minor change which was suggested on Committee Stage by Deputy Donegan and Deputy James Tully and it provides that the minimum quorum in any general meeting of a credit union shall be five. Paragraph (a) of the amendment is designed to meet this point which was raised by the Deputies.

Mr. Donegan

This is very good.

Amendment agreed to.

Bill recommitted in respect of amendment No. 4.

Mr. Donegan

Why does it need to be recommitted?

An Ceann Comhairle

It is a technical point, a specific matter that was not raised on the Committee Stage.

Mr. S. Flanagan

It does not directly arise out of discussion on Committee Stage.

Mr. Donegan

Are we now discussing it in Committee?

An Ceann Comhairle

Yes. That means there may be as wide a discussion as the Deputies desire.

Mr. S. Flanagan

I move amendment No. 4:

In page 17, between lines 39 and 40, to insert the following new subsections:

"(4) Any person who is for the time being entitled under the Standing Orders of either of the Houses of the Oireachtas to sit therein shall, while so entitled, be disqualified from becoming a member of the Credit Union Advisory Committee.

(5) Where a member of the Credit Union Advisory Committee becomes a member of either House of the Oireachtas he shall, upon becoming entitled under the Standing Orders of that House to sit therein, cease to be a member of the Committee."

I am merely offering this amendment as an earnest of my intention that the Credit Union Advisory Committee should not merely be, but should be seen to be, an impartial body free from any influence that might possibly be regarded as inimical by the promoters of the credit union movement. The object is to provide that persons who are members of either House of the Oireachtas shall be disqualified from membership of the Credit Union Advisory Committee. If a person is in fact a member of the Advisory Committee, he shall forthwith, on election, cease to be a member. To be quite candid, I am easy about this so far as the House is concerned. If they desire this, it can be inserted and if not, I shall withdraw it.

Mr. Donegan

This is something that has come up in the creation of some Government bodies over a long number of years and my reaction every time I see it is: What civil servant thought this one up? I do not see any reason why politicians cannot be members of certain bodies, why they should be the only type of person excluded. One can think of persons in various vocations who might be excluded. One might say that a garda who has a vested interest in law and order in the area might be excluded but why exclude Members of the Oireachtas? Because they are members of political Parties? Is this a bad thing? Is it something that nice people do not do—be politicians or members of Parties? I am certain that this is a run-of-the-mill provision that comes up constantly.

I can think of certain boards, like An Bord Bainne and An Bord Gráin, where you meet this provision that Members of the Oireachtas cannot be members. I can see all sorts of other people going on all sorts of things. Personally—and I mean that; it is a personal approach—I do not see why politicians cannot be members of the Advisory Body for credit unions and why certain politicians could not be of great value. For instance, an ex-Minister for Finance who might have had ten years of experience in that office could be of great value as a member of the Advisory Committee.

Mr. Corish

But he could be a member.

Mr. Donegan

Not if he is a Member of the Oireachtas.

Mr. Corish

You would not be plugging that hard for Dr. Ryan?

Mr. Donegan

I am not. I think I am plugging for Deputy Lynch but, apart from that, it is wrong, I think, that such a man should be excluded. There is a sort of flavour about it that these fellows are members of political Parties and not as good as the rest of us. No matter who takes that line, I believe that we are as good as the rest and in many cases considerably better.

Mr. Corish

I have as much respect for politicians as Deputy Donegan— perhaps more—but I think this section should go in. I do not think it is a reflection on Members of this House or of the Seanad. A Member of this House who is a member of the Advisory Committee for Credit Unions would find himself in a rather invidious position not only vis-á-vis the Minister but the other Members of the House because he might feel constrained to speak as a Member of this House on credit union matters and he would be more or less talking with two tongues, so to speak. This is a usual section inserted into Bills which include a proposal to create a semi-State body or a body under the aegis of the Minister. On balance, and with all due respect to Deputies and Senators, I say they should not be entitled to be nominated as members of this Credit Union Advisory Committee.

Mr. O'Leary

With whom does the Minister consult before he actually nominates people to this Credit Union Advisory Committee? Is this left to his sole discretion?

Mr. S. Flanagan

It would be. In the normal way, he would certainly consult the Credit Union League and possibly other interested organisations.

Mr. O'Leary

Does the Parliamentary Secretary see any point in it? This, in fact, would be the line he would follow—he would consult with the Credit Union League?

Mr. S. Flanagan

Any interested organisations.

Mr. O'Leary

The Parliamentary Secretary would take their majority opinion as to whom he would nominate?

Mr. S. Flanagan

We discussed that. We felt that would not be proper. The Minister himself would have the final discretion and final say as to whom he would appoint. You could not have the Minister tied.

Mr. Corish

Is there a salary or fee for this?

Mr. S. Flanagan

No. There is nothing specified, but there is provision in the Bill.

Mr. O'Leary

Could the Parliamentary Secretary visualise having any commercial banking interests on this advisory committee?

An Ceann Comhairle

This is cross-examination.

Mr. O'Leary

It is very interesting to know what is behind the actual nominations to this committee.

An Ceann Comhairle

All right.

Mr. O'Leary

It is for that purpose. A lot depends on the personnel of the committee. It is very important to the development of the credit union movement that we are quite clear as to how exactly these people will be nominated and what bodies will be consulted.

An Ceann Comhairle

The Deputy could make a statement on the matter and ask these questions.

Mr. O'Leary

I am sorry; I did not intend it to be in the nature of a cross-examination.

Mr. S. Flanagan

We have it in the Bill that the people who will be nominated to the committee will be able to contribute towards it by reason of their knowledge of the credit union movement or other knowledge. So, presumably someone from the commercial banking world could make a suitable member of the committee. I do not think one can tie oneself in this. The question is, after all, one for the Minister to decide and he is obliged by statute to nominate people who in his opinion understand what they are doing and would do a good job. I do not think we can go further than that.

With regard to the amendment itself, I must say, as I said in the beginning, that I am in the hands of the House. I offer this amendment more as an earnest of goodwill than anything else. I am inclined to agree with Deputy Corish's viewpoint rather than with Deputy Donegan's because, while it is true that Members of the Oireachtas would in themselves make very suitable members of most committees and boards from which they are excluded, I do think there is validity in the point that as Members of this House they might be put in an invidious position if they were simultaneously Members of this House and members of committees such as this. It is essential to preserve the absolute freedom of Members of this House within themselves. As I said in the beginning, I am in the hands of the House as far as this amendment is concerned. If the majority opinion is in favour of the amendment going in, well and good. If it is not, I am prepared to withdraw the amendment. Personally, I favour Deputy Corish's viewpoint.

Mr. Donegan

Nobody is going to press this to a vote. To tell you the truth, I regard the Parliamentary Secretary as a very decent, quiet man and I do not believe he thought it up. I am very fond of civil servants. Among them I number my greatest friends. I think they thought it up. I think the delivery of the Parliamentary Secretary of this amendment to the House rather proves the point. He is not here riding it home.

Mr. S. Flanagan

I resent this nonsense.

Mr. Donegan

One might say his riding instructions given to himself are not to win. I sincerely believe that there is no reason why a Member of this House cannot serve on the Advisory Committee for Credit Unions. I am not looking for the job. Neither is anybody else in this House. I do not see why membership of a political Party should cut a person out of such activities. For instance, is it wrong that Senator Bob Lahiffe or Deputy Corry should be Chairman of the Beet Growers' Association? If they get the number of votes that puts them there, well and good. If the Minister desires to nominate them in this instance, it is all right by me. A Minister could hardly nominate one of his own without nominating a member of another Party. For 14 years I have watched this clause being inserted all over the place, in the case of semi-State boards and various other organisations and, quite frankly, I think it is not right. I am not pressing it.

Mr. Corish

I do not think anybody has slipped up here, least of all the Parliamentary Secretary.

Mr. Donegan

No.

Mr. Corish

I do not want to put myself in the position of defending either of them. This is a usual clause in a Bill like this. It is not a bright idea. May I correct myself? It is a slip up in that it should have been in the original Bill. I would be prepared to discuss this much more fully but I do not think it should be discussed and decided upon in isolation because this clause is in about 20 to 30 Acts of Parliament.

Mr. Donegan

That is right.

Mr. Corish

If the Parliamentary Secretary is fair to himself he should insist on this occasion that it would go in. This Bill is not big enough to determine this principle. This should be determined in some major piece of legislation. It should be decided, if you like, by motion of the House and have it deleted if the House so decides from all these measures in which it is included.

Mr. Donegan

All right.

Mr. S. Flanagan

I am inclined to agree with that point of view. I rather resent Deputy Donegan's approach to this matter, that I did not think this up.

Mr. Corish

He is trying to say that you had an apprentice's allowance.

Mr. Donegan

No.

Mr. S. Flanagan

Something like that. It is neither fair to me nor to my advisers. The position is that on Committee Stage certain suggestions were made with regard to the structure of this committee, that the membership might be such as to harm rather than help the credit union movement and, in fact, these suggestions came from Deputy Donegan's Party as well as from members of the Labour Party. I held a discussion with my advisers as to how we could further ensure that not merely were our intentions good but that they would be seen to be good and we decided that this would be a further earnest of our good intentions. That is the history of it. I do not think Deputy Donegan's remarks are called for.

Mr. Donegan

I did not mean to be nasty or anything like that but I do believe that it is a proviso that should not be in all those Bills. Maybe Deputy Corish is right when he says that this is not the major place in which to battle out that decision. Everybody seems to be very keen on the idea that politicians should not be allowed to be in certain places. I do not think that is a right idea. I am not pressing the matter. The Parliamentary Secretary's good faith in this instance is entirely and absolutely accepted.

Mr. Corish

It does not make any difference in this Bill but it does make a difference in the case of membership of CIE, Bord na Móna, and so on.

Mr. Donegan

That is right.

Amendment agreed to.

Amendment reported and agreed to.

Mr. S. Flanagan

I move amendment No. 5:

In page 18, between lines 12 and 13, to insert a new section as follows:

"32. (1) Legal proceedings in respect of any contract or other transaction entered into by an unincorporated body before the date on which it secures registration as a credit union by virtue of this Act, or purporting to be entered into by that body or by any person on its behalf before that date, may be brought by or against the credit union, subject to the Statute of Limitations, 1957, as if it had been registered as a credit union by virtue of this Act at the date of the contract or other transaction.

(2) Subsection (1) shall not apply to any body which first secures registration as a credit union by virtue of this Act on a date which is more than two years after the commencement of this Act."

This is an alternative draft to an amendment put down by Deputy Treacy and Deputy Tully on Committee Stage and will remove any legal difficulties which might otherwise arise for existing credit unions in endeavouring to recover loans issued before they will become registered under this Bill. The object of subsection (2) is to impose a time limit in this special provision. In the normal course a credit union should not do business before registration and there should be no continuing statutory inducement to do so on the lines set out in subsection (1).

Amendment agreed to.

Mr. S. Flanagan

I move amendment No. 6:

In page 18, to delete lines 13 to 20.

We had considerable discussion on Committee Stage with regard to section 32, which was opposed by Deputy Donegan. I have agreed to delete the prohibition on advertising on account of these objections but, instead, I will introduce a related amendment, the next one, to section 35, which will empower the Minister, instead, to introduce restrictions on advertising where the Credit Union Advisory Committee agree.

Mr. Donegan

This amendment seems to satisfy me completely on the matter and I should like at this stage to thank the Parliamentary Secretary for the kindly way in which he received our suggestions on Committee and considered them deeply in a very short space of time and was prepared to meet us because he felt we had a case. I think it is satisfactory.

Amendment agreed to.

Mr. S. Flanagan

I move amendment No. 7:

In page 19, to delete line 25, and substitute:

"(k) prohibiting such forms and methods of advertising by credit unions or by particular categories of credit unions as are, in the opinion of not less than six members of the Credit Union Advisory Committee, contrary to the aims of the credit union movement."

This is consequential on the acceptance of amendment No. 6.

Amendment agreed to.

Bill, as amended, received for Final Consideration and passed.