I welcome the main thrust of the Bill which has taken a long time to produce. While we on this side of the House had an input into its drafting prior to leaving office, some aspects are causing concern and we intend to table amendments on Committee Stage to deal with them. The Irish League of Credit Unions has lobbied successfully on behalf of its 427 units throughout the Republic to have changes made.
The credit unions promote the concept of self-reliance and to empower their members to provide for their needs through their own efforts. This ethos, which is based on co-operation, was uppermost in the minds of the founders of the movement in the 1950s. We tend to overlook the motives which prompted these pioneers to establish credit unions. The next phase of development should proceed in a structured way. It is to facilitate this that this legislation has been introduced.
We are all aware of the effect credit unions have had on the social fabric. Some tend to think of them as rural based organisations but there is no major town without an active and vibrant credit union. New credit unions are springing up throughout the suburbs of Dublin city. Many people do not realise the extent of which credit union members give of their time voluntarily. This is underestimated.
Legislation which hinders or frustrates the development of credit unions will prove damaging. The restrictive caps that the Minister of State proposes to impose on shares, deposits and loans will have a serious effect. The right of credit unions to own property will also be restricted. They will no longer be allowed to buy and sublet property to community organisations. The Minister of State should seriously consider amending these provisions on Committee Stage.
In certain areas the Bill will be intrusive and tend to centralise control. This is unwarranted. The credit unions are self-regulated, have acted responsibly and demonstrated the value of the co-operative approach in resolving problems. They have managed their own affairs successfully. Any attempts to make changes by way of legislation should be discouraged.
There are few individuals and families whose lives have not been affected and improved by the use of credit union facilities. With more than 1.65 million members, the credit unions have grown not by way of a major marketing campaign or sophisticated advertising but through the service they offer and deliver to their members. Credit unions are owned and run by their members and set out to serve their needs. That is the basis of their success. The credit union movement is one of the most successful co-operative movements this country has witnessed. Credit unions do not make profits. They are owned and run by their members for the good of their members. A cornerstone of the movement is that anyone can join a credit union and that distinguishes them from other financial institutions motivated by profit. One notices the difference in walking into a credit union and walking into one of the commercial banks.
I know of the work of the credit union movement on behalf of the community. It serves its members in a number of ways including its involvement in sponsorship. Recently a school principal told me she was amazed at the amount of support the local credit union gave her school. Students go on to be active members in their credit unions.
The involvement of credit unions in supporting and sponsoring various sporting events reflects well on the movement. The community games is one of the major events supported by the Irish League of Credit Unions. The finals of the games are held annually in Mosney in September and are enjoyed not only by the participants in the sports events but by the parents and the organisers. The league's involvement in that successful sports weekend is a credit to the movement.
I have seen the valuable input of credit unions to rural and urban society. They have had a great impact on large urban areas and towns in my constituency, like Carlow, Tullow and Bagenalstown. Members of parishes and rural communities are brought together by involvement in their credit unions and that should be supported. People's lives have been changed by their involvement in and the assistance given by credit unions. Some people who would otherwise be driven to approach greedy moneylenders have received assistance from credit unions. They were given dignity and credit union money breathed new life into communities whose outlook has been changed by the facilities offered them.
I am concerned about a number of aspects of the Bill. The limit applying to loans, shares and deposits is too restrictive and I ask the Minister to reconsider it and table amendments on Committee Stage. The Irish League of Credit Unions lobbied for the introduction of this Bill and gave the Minister of State and the Department detailed submissions of amendments to the restrictions applying to shares, deposits and loans. It requested that the maximum level of shares should be increased from £20,000 to £30,000 and the maximum level of deposits from £20,000 to £50,000. That proposed maximum limit for deposits may be too high, but the current maximum deposit of £20,000 should be increased. The maximum limit applying to loans should also be increased. Credit unions have been successful in granting loans to fund house extensions. With relatively ordinary houses in Dublin selling for £90,000 to £100,000 and house extensions and improvements costing in the region of £30,000 to £40,000, the maximum loan of £20,000 is too low. Will the Minister give serious consideration to reviewing those limits on Committee Stage?
The Bill restricts the amount of savings a member can have with the credit union. I fail to understand that restriction as members are entitled to only one vote, irrespective of the amount of money they have on deposit. Under current legislation a member may save as much money as he or she wants to save with a credit union. The cost of materials, particularly in the housing area, is expensive and for that reason the maximum loan of £20,000 should be reviewed.
There is a serious anomaly in credit unions investing in property to benefit the community. Having regard to the work they do in the community, the provision in that regard should be changed to assist them.
The Bill brings into play the role of the Irish League of Credit Unions which, to date, has been largely supervisory, but it will change under this Bill. There are 427 credit unions affiliated to the Irish League of Credit Unions and it has expressed to the Minister of State its disappointment about certain aspects of the Bill. It has asked that amendments be introduced in line with its views expressed at a recent meeting. Those views should be given serious consideration. It is anxious that the limits on shares, loans and deposits are increased.
We recognise the important role played by credit unions in society for the past number of decades. We should encourage and support the credit union movement in any legislation enacted by this Oireachtas. The Minister of State should seriously consider tabling amendments in line with what is sought by the Irish League of Credit Unions, which is acting on behalf of its members. I appreciate his intention to table some amendments. Limits should be a percentage figure taking account of the size of a credit union. The right of credit unions to decide what their members want to do with surpluses should be provided for.
The procedures set out in section 48 covering the provision of new services are daft. If we were to follow them, it would take more than two years to introduce even the smallest new service to credit union members. Is the Minister of State seriously suggesting those detailed procedures are necessary before a credit union makes even the smallest new service available to its members? There is a difference between the development of a major new service and meeting the simple needs of credit union members.
Some credit union officials are upset by the provisions on regulations. Not alone does the Bill provide for the proper regulation of credit unions, it seeks to take over and run the movement, which is wrong. Until now credit unions have been successfully self-regulated. How will the Registrar of Friendly Societies police the credit union movement, given that at present he has considerable difficulty reporting his work? The last report he produced covered a number of years ending with 1993. Without providing a major increase in resources and finances to that office, the registrar will find the increased workload under this Bill unsupportable. It takes the registrar two years to process the annual returns of credit unions and only rarely does he inspect a credit union. The control and supervision of credit unions has been successfully done by the movement through the Irish League of Credit Unions.
The movement is self-regulated. Every credit union operates under rules approved by the registrar; every loan or amount saved is insured; every person who works in a credit union is bonded and the movement has its own savings protection scheme. It is to be commended on all these matters. The Irish League of Credit Unions inspects almost every branch annually and audits its activities professionally. Despite that it is disappointing to note that the Bill does not recognise the rule of the league in the overall scheme of things.
I express my appreciation of what credit unions have done for society over many years. There is much merit in most of the provisions of the Bill but others are disconcerting for credit unions which because of their track record, particularly in supporting rural society, should be encouraged rather than discouraged from taking on additional services.