Finance (Miscellaneous Provisions) Bill 2020 [Seanad]: Committee and Remaining Stages

Sections 1 and 2 agreed to.

Amendments Nos. 1, 2, 5 and 10 are related and may be discussed together.

I move amendment No. 1:

In page 4, to delete lines 2 and 3.

Deputy Sherlock, who tabled the amendment, is not present, but he has a keen interest in this area. I am deputising for him. I will be brief.

Amendment No. 1 relates to proxy votes. As the Minister of State is aware, we are genuinely concerned regarding the application of proxy voting and how that would operate, as are some credit union organisations across the country. I understand the concluding remarks of the Minister of State on Second Stage regarding how proxy votes will be introduced as an option for credit unions and that they will not be permitted to use proxy votes during the interim period. He may correct me if I am wrong. More work may be done by the credit union movement and, indeed, between the credit union, the regulator and the Department before the proxy voting situation could be applied, assuming that the legislation as it is currently framed is passed. I understand that there is an urgency around allowing AGMs to take place and making modifications to the rules. Of course, people are anxious for dividends and so on to be paid early as possible. Under their own rules, credit unions are required to hold AGMs within certain periods of time.

Notwithstanding all that, there is a need to address genuine issues in respect of security, the general data protection regulation, GDPR, transparency and other important governance matters. That is what amendment No. 1 is designed to do. This is an issue of particular concern to my colleague, Deputy Sherlock, and I am interested to hear the views of the Minister of State on it. I would also be interested if he could elaborate on whether the Central Bank was consulted regarding this particular provision, as well as the other provisions of the Bill.

I thank the Deputy. To deal with his last point first, there were consultations with the Central Bank. The existing legislation would allow the Central Bank, using its discretion, to defer AGMs until the end of April in any event. However, we believed it necessary for the Oireachtas to decide to put that on a legislative basis. There is provision in the Bill for further extension of the period within which an AGM must be held if the Minister is of the opinion that is necessary. We are having this debate substantially because the physical meetings cannot go ahead because of Covid. The whole concept behind the legislation is to facilitate credit unions, rather than to oblige them to do something.

I am coming to the issue of proxy voting. These are what I would call governance and operational matters. The legislation will allow flexibility in that regard. I do not think the legislation should be so prescriptive as to set out in legislation strict rules on proxy voting. The practice in that regard will vary from credit union to credit union. All we are saying is that credit unions may bring it in if they so wish. The obligations in respect of GDPR and confidentiality in the context of such issues will be a matter at operational level within each credit union that chooses to go down that road.

We have received correspondence from various credit unions and credit union representative bodies, including the Credit Union Managers Association, pointing out that it will be difficult. I agree that it will be difficult. It will the first time for organisations that wish to go the virtual route to do so. They will have to consider security and how they will ascertain who is logging in to the meeting. Ireland has grown up a lot in respect of virtual meetings since Covid came. There are sporting organisations and farming organisations, including large farming organisations, that are holding virtual AGMs because their members cannot physically come together. Those organisations are not prevented from doing so but credit unions cannot do so unless we pass this legislation. The point of facilitating virtual meetings is to allow meetings to happen such that all the members can get the financial information in a timely manner. It is also important for the audits to be completed and sent back to the Central Bank, which is the regulator, such that it can have a full view of the overall position of the credit union movement as soon as it is fair and practical to do so. This legislation aims to facilitate all that. The only real power being given to the boards of directors during this interim period is to permit them to arrange the AGM after 31 January.

I stress that I already took the Bill through the Seanad. It was passed by the Upper House on 30 November.

Arrangements are in place for an tUachtarán to sign it promptly, and credit unions know that this is coming down the tracks. They will be in a position to arrange AGMs as soon as they have an ability and are free to do so as early as possible in the new year, if they wish. Some of them might decide to wait and see what health restrictions are in place in February or March and wait to hold the AGM then, and they are free to do that. Those who wish to do it early can do so by carrying it out virtually if the health restrictions would prevent the members coming together for a physical meeting. It is important to stress that an AGM can be a combination of a virtual and physical meeting.

On some other points, I understand what Deputies are saying about the issue of people voting in advance, but some credit unions might wish to allow members to have a postal vote. It will be up to each credit union through its software suppliers to ensure the integrity of the voting, that each member gets only one vote and there is a link and a code to link into the system. It will have to have a system that knows who sent or has not sent in a proxy vote. I wish to deal with the proxy voting as well and the 48-hour provision in the legislation. That is the latest possible time. I expect credit unions to have a system in place whereby they would request their members, if they are arranging proxy votes, to have it in four, five or six days in advance. Legislatively, however, the last possible moment will be two days in advance of the AGM.

There was a question about some credit unions that traditionally hold their AGMs on a Monday, which would mean a great deal of work having to be done over the weekend by the organisers of the meeting. It might involve weekend work or they could easily move the AGM to a Wednesday or Thursday or another day in the week that would not involve the 48-hour period covering a weekend. After they get used to it on the first occasion, they will be well able to carry out the proxy voting on the second occasion. That is if credit unions choose to go down that road. Most of them might choose not to because of the concerns of members, while others might feel it is appropriate in family circumstances to allow the one, two or three votes. It is also important that the legislation provides, which is obvious, that a person cannot nominate two different people to be their proxy vote, with two people arriving as proxies for one individual. That is specifically in the legislation.

I hope Members will see that this Bill seeks to facilitate the credit union movement in the future. The only thing we are facilitating is the board of directors proceeding with an AGM early in the new year, if it wishes to do so. It can do it virtually. The board can make that call. I also wish to refer to the reason for the seven days, if we move to the seven-day period. Many people might get the notice of the AGM, have a look at it the following weekend and see that they must give in the details of their proxy a week in advance of the AGM. People tend to make up their minds closer to the deadline. They can still send it in up to seven days before the AGM, but we are providing that the latest time for its receipt is 48 hours. It could not be any closer as it would not work physically. As with most things, I hope people would not wait until the last minute, so it will not be necessary to have that big gathering of proxy votes. Again, most of that can be done physically. Some of it will be done virtually as well. I hope the software will be in place to facilitate the credit union movement. Many people have had to make arrangements for new technology, so I believe it will be able to do that. They are the main points about the proxy. I understand the concerns, as they were my immediate concerns. However, when I looked at the details of the legislation, it was clear.

The final point raised was how soon the credit unions can have their AGMs. Clonmel has been mentioned in the House by every Deputy from Tipperary in the past week or so. That credit union habitually held its AGM before Christmas so it could give members an interest refund. That was strictly its local arrangement. Nothing in the legislation impacts on that. It was traditional that the credit union had its AGM early so it could give an interest refund to people before Christmas. I have made a practical suggestion. Many of its members might be happy to wait until it has its AGM early in the new year to get that refund, but the credit union will know the members who were reliant on getting that money before Christmas for the Christmas shopping. It will know how much a person was due to get in a refund had the AGM taken place at the usual time. The credit union and the member will be well able to make arrangements to tide the member over until the AGM early in the new year.

I believe I have covered the points raised. I might have strayed into one or two of the other amendments, but they are all germane to the credit union legislation.

As I said, we support the legislation. There has been engagement in the House but there has also been engagement with the Department regarding the concern about proxy voting. It goes against the stated intention of the movement. There are issues with Covid and the facilitation of online AGMs, but I will take that out of the equation because we are not concerned about that. There will be support for this legislation across the House, so I am sure we will be able to conclude it in due course. There are only two or three core issues.

The Minister of State said that the legislation is not instructing or compelling credit unions to facilitate proxy voting. However, proxy voting goes to the core of the function of a credit union. It is about having one's account and shares, and one member with one vote. It is that ownership model. As has been pointed out, there could be a situation now where an individual, a non-member of a credit union and perhaps somebody who has a conflicting position to the credit union, could have up to 200 votes at an AGM. That is a theoretical position, but it is allowed.

When I look at the legislation, I wonder if it is fair. The Minister of State is just empowering the credit unions to decide themselves. Is he empowering the membership of the credit unions or empowering the credit union board? Who decides whether proxy voting will be facilitated in any credit union in the State? Is it at the AGM? If it is, proxy voting cannot happen because the decision has not been made at that point. Is it prior to the AGM? That would mean the membership of the credit union would not have a say on a fundamental change in that credit union regarding how voting would be carried out, how key positions would be elected and how the positions of the credit union would be agreed. I seek clarification on that matter.

I am happy to clarify that. There are two positions here. There is the interim period, which is only for this round of AGMs up to the end of April. It can be extended if the Minister considers it necessary to do so, but it is on the basis that we will get there by the end of April next year. The only power being given to the board of directors is to proceed with an AGM. The issue of proxy votes is specifically covered in section 11. Subsection (1) states: "Subject to subsection (3), a credit union may allow in its rules for any member of the credit union entitled to attend and vote at a general meeting of the credit union to be entitled to appoint another person (whether a member or not) as his or her proxy to attend and vote instead of him or her." In simple English, that says the credit union may allow it in its "rules", which is the important word. The board of directors cannot do this if it is not already in the rules of the credit union. It cannot introduce proxy votes unless it is in the rules, and we are not aware of any credit union in Ireland that has this in its rules. The issue never came to the fore before now. Second, it will be up to the members at a future AGM to change the rules for subsequent meetings. It is strictly the members, and it cannot apply in the interim period because the board of directors does not have the power to change those rules. If it is not in the rules, it cannot happen.

That clarification is very important. The Minister of State is saying that according to the knowledge of the Department and the Minister, none of the credit unions currently has this in the rules.

As I said, many are opposed to this. Therefore, there will be no AGM this year that will allow for proxy voting. There may be an AGM that would have a motion to change the rules to allow for proxy voting in future years, but that would be done by the membership. That is an important clarification.

The second point on this measure is that, from my understanding, the credit unions do not want it, so where is it coming from? It is not a Covid issue. It is not a case of someone being vulnerable, as he or she has an underlying condition or is self-isolating, and he or she wants a son or daughter to attend the AGM either physically or remotely in the case of someone without access to broadband or that he or she was not technologically savvy. It is not a Covid-19 issue because it will not apply in the Covid-19 era, it will only apply post September next year, if it applies at all. Therefore, where is the demand coming from? Why has the Department decided to go down this road contrary to what has been suggested by the Credit Union Advisory Committee, CUAC, in its report? The submissions indicated clearly that people did not want this type of facilitation, if one wants to call it that, because that is what it is, it is facilitating credit unions to change their rules.

In December 2017, CUAC did publish a policy paper on alternative means of voting by members. I accept that there is not a widespread view among members of credit unions that they should have proxy voting. Some people have said that it might facilitate a greater attendance at AGMs. We all know credit unions have thousands of members and there might be 70 people or 80 people at an AGM. Sometimes, there can be more, but a tiny percentage of members of credit unions actually attend AGMs currently. We think if we allow this change, that in due course it might increase the attendance and the involvement of people at an AGM. I accept that it is not for every credit union and that some credit unions will not want to know about it but we want to make it available for those which do want to go that route.

There are different types of credit union. Some of them are geographically-based and others are industry-based and there might be different practices, for example, in a credit union that is connected with a particular workforce, which might be more inclined to go there, rather than the type of community-based one that operates in a particular geographic region. I understand the demand for this is not overwhelming. Some will not go near it, but for those who want to go down this route, we will remove the legal obstacle preventing them from doing so. Let us see how it works. That is my view on it. If we are here in five years' time, and no credit union has done it, so be it.

Amendment, by leave, withdrawn.
Amendment No. 2 not moved.
Section 3 agreed to.
Sections 4 and 5 agreed to.

Amendments Nos. 3 and 6 are related and they may be discussed together, by agreement. Is that agreed? Agreed.

I move amendment No. 3:

In page 5, line 33, to delete ", whether before or".

I will speak on behalf of Deputy Sherlock. I will curtail my remarks on the amendment. I referenced this particular point in my Second Stage contribution. Both amendments relate to the word "before". The Minister of State will be familiar with them. As I outlined previously, we have concerns about business being dealt with before a meeting takes place and they are based on issues relating to transparency, security, safety and integrity. We need to proceed very carefully on this matter. The truth is that, insofar as is practicable, all of the decisions should be made, not in advance but at meetings when people have access to all of the information that they need and can understand fully what is being put before them. There is a risk of undermining governance and the manipulation of outcomes of meetings.

While I do not want to stray into other aspects that are not covered by this amendment, there are concerns about the integrity of the technology and the burden that all of this might impose on credit unions that may already be stretched in many ways. I think the Minister of State would accept and understand that. We also have concerns about ensuring that the fitness and probity criteria and requirements are followed. The Central Bank and the credit union movement worked very hard on that in recent years in terms of people going forward for election to sensitive positions. These issues need to be addressed at meetings, not in advance.

Could the Minister of State clarify a point he made earlier on voting in advance? Did he mean exclusively by post or would arrangements be made for individual members or an accumulation of members represented on some occasions by a proxy, to vote by means other than by post? That would be an important clarification. I do not think anybody would have an issue with postal voting in advance. The question I have is whether the Minister of State would be concerned about the integrity of the process if it is done electronically given the risk of exposure involved in that.

I mentioned this issue on Second Stage. Amendment No. 3 relates to a matter Deputy Nash and I have raised concerning pre-voting. The legislation does not refer to post but rather to electronic means.

I wish to focus on one core part of the issue. The amendment is to delete the words ",whether before or", which would not allow for pre-voting. I know the Minister of State may say this is about enabling the credit unions to decide for themselves but if there is a belief that we should allow credit unions or banks to make up their own rules, then let them make up their own rules and let us not regulate them at all. The Oireachtas passes laws that allow or enable credit unions to do certain things and the question is whether this is an appropriate power for a credit union to have. The question is a genuine one that has been raised by the credit union movement itself on the impact the change could have on the integrity of the nomination committee. The concern has been raised by the Credit Union Managers Association, CUMA, and I hope it can be addressed by the Minister of State today.

In this section of the legislation the Minister proposes to introduce pre-meeting voting where members who are not present at the AGM can vote prior to it by electronic means or whichever means the credit union may decide. As the Minister of State is aware, the nomination committee is one of the key committees established under the Credit Union Act, so it is not insignificant. The purpose of the nomination committee is to ensure that nominees to credit union directorships meet the highest standards. This is something we discussed previously in other legislation in this House. It is an essential part of what is described as their fitness and probity regime, which is so important in financial institutions. A very difficult lesson was learned in that regard by the State, not with credit unions but with the banks.

The Minister of State will be aware that the Central Bank wrote to lenders and insurers on 17 November warning that they were failing to follow fitness and probity rules. These are in place to ensure key staff meet the highest standards of confidence, honesty and integrity. Fitness and probity are vital for lenders, including credit unions. As part of its process regarding nominees, the nomination committee shares a report with members, those who elect the directors. That report is shared by the nomination committee with the members and then the members elect the directors.

Under the credit union rules, this report is shared in advance of any voting but under section 6(4)(a) of this legislation, a mechanism is allowed whereby votes could be cast by members before a meeting, therefore suggesting that voting would be allowed to take place before the nomination committee sends its report to members. Consequently, members would be voting on the election of directors, which is crucial with respect to fitness, probity, integrity and all the rest, without the benefit, it could be argued, of having the nomination committee's report shared with them. That would be crucial in informing them of voting positions.

The matter has been raised with the Department of Finance by credit unions and it is really important that the Minister of State clarifies this. He commented that we can see how this will work out but perhaps in this case we should take a little more time and not allow for pre-meeting voting at this stage so we can have further discussions with the credit unions.

I thank the Deputies. The section indicates a credit union "may" and I keep referring to that word. We are here to facilitate and help credit unions run their businesses and the conduct of voting at an AGM should be regulated by the credit union's own rules, which vary between such credit unions, rather than through legislation. The big change we are making in this legislation is to allow an extra three months for the process, and this requires legislation because a date is specified in legislation already tying it to the end of January.

On the matter of these meetings being conducted in different parts of the country, we have all spoken about the integrity of the board of directors and key staff. We should not tie their hands too much in legislation. The section states: "A credit union may provide for participation in a general meeting by providing or facilitating, for that purpose, the use of electronic communications technology, including a mechanism for casting votes by a member, whether before or during the meeting." A vote could include a postal vote, for example. I am speculating but if people said they could not make a meeting on a Monday night and a proxy vote is either not allowed or desired, there might be the option of putting a ballot box in the credit union or wherever the AGM is being held so that people can cast the vote an hour or two beforehand in the afternoon. There is scope for people to participate in an AGM perhaps by casting a vote by postal ballot in advance. A credit union would not be excluded by having a ballot box at a particular location in the head office, for example, for 24 hours before the meeting if people want to vote on the day but cannot make the meeting.

I hope credit unions will take such flexibility on board if they feel it is in their interests. The Deputy has mentioned that somebody could have 200 proxy votes but I cannot envisage how any credit union would amend rules to allow anybody to have more than a handful of votes to facilitate family member or a neighbour who cannot go to the meeting. If a credit union went to a very high number of proxy votes per person, it would be open to some big risks and it would be very hard to see how that would pass through an AGM. Other people would feel they would be outvoted by others with a large number of votes. I am being practical. If some credit unions want to go with ten or 20 proxy votes, although I would not personally recommend it, they can make their own rules. The number of votes that would at any stage be allowed by proxy will be quite limited.

We know what is different here and it has been mentioned that it is the DNA of credit unions that there is one vote for each member. Everybody understands that. When we speak of proxy votes in the Oireachtas, people think of companies and shares where a shareholder may have 25% of the shares. That shareholder can give a proxy vote to somebody else. In limited companies with shares, voting strength is determined by the number of shares and it is not a case of each shareholder having one vote. One shareholder could have the majority of votes in a company. We often think of proxy votes in that context but the credit union movement has a principle of one vote for each person. I expect the credit unions will keep very close to that even if they are of a mind to move a little away from it to facilitate older people who might not be able to make a specific meeting, for example.

I take the point about the nomination committees. There are practical issues involved. We should not hold up the legislation with this and it is something credit unions might discuss. They can consider if there is a mechanism to get the nomination committee report to members immediately before the AGM rather than being physically distributed at the meeting if some people cast their votes beforehand.

People may want to hear the nominations board recommendation at the meeting and some credit unions may use this as a reason not to introduce early voting through postal votes. People would vote at the meeting if they are there, online or in another mechanism. It may be a reason some credit unions may not go down the early voting route while others may be happy to do it. There is flexibility and, from a practical perspective, each credit union would have to look at a mechanism to have the nomination committee's report out before any of the members cast their vote if they choose, at a local level, to allow early voting.

I am trying to be fair and reasonable. We are trying not to be overly prescriptive and we want to give maximum latitude. I take the point but we are not saying "On you go". The argument I have heard since taking this role is that there is too much regulation but we are allowing scope on this. The credit unions normally complain about too much regulation and the additional associated costs. Members know that just a short while ago we reduced the levies that the Central Bank imposes on credit unions by more than 50% for the coming year. It is an indication of our support of credit unions and acknowledging where they are.

I am answering Members' queries as best I can and in good faith. We all have trust in the credit union movement to do their business properly as best suits their local needs. That is why I do not wish to include the amendment. This been through the Seanad but we want the legislation finished well before Christmas and signed by the President as quickly as possible.

Amendment, by leave, withdrawn.

I remind Deputies that Committee Stage is to conclude after 60 minutes. I know there are a number of amendments they wish to speak to. We are approximately halfway through the allotted time.

I move amendment No. 4:

In page 5, between lines 37 and 38, to insert the following:

"(c) The reference in paragraph (a) to casting votes includes casting votes on a resolution and casting votes at an election and, in relation to voting at an election, the mechanism referred to in that paragraph shall ensure the secrecy of the ballot.".

I would appreciate the Minister of State's view on this amendment, which concerns maintaining the secrecy of the ballot. This is clearly critical. We know the credit union movement is essentially the people's bank. The Minister of State knows only too well the democratic and community-based nature of it. Members of credit unions are always concerned that the integrity and principles of the credit be upheld, particularly that of one member, one vote, with secrecy of the ballot and so on. I would appreciate his view on the amendment.

I thank the Deputy. Everybody is concerned about the integrity of AGMs, including proxies, timing and the secrecy of the ballot. The Deputy will be satisfied to hear that the amendment relating to ballot secrecy is not necessary as the legislation details exactly when secret ballots are required and that the board of directors of a credit union shall be elected, in any case, by secret ballot. We have written into the legislation that the election of the board would be by secret ballot so the amendment is not necessary. The intention is correct but we have the same view, so the issue has been dealt with in the legislation.

Amendment, by leave, withdrawn.
Amendments Nos. 5 and 6 not moved.
Section 6 agreed to.
Sections 7 to 10, inclusive, agreed to.

I move amendment No. 7:

In page 11, between lines 12 and 13, to insert the following:“(4) A proxy shall not be entitled to act as a proxy on behalf of more than one person.”.

This amendment is in connection with the issue of proxy votes. The Minister of State heard my comments earlier about concerns raised by some sections of the credit union movement. Proxy voting is a feature in the election of representatives to different parliaments, as is postal voting. We do not have proxy voting in this jurisdiction but in the north east of our island, proxy voting is facilitated and has been for many years. It is a way to increase participation.

Despite our concerns, what we have done here is to try to deal with the issue. Proxy voting is illegal or unlawful in credit unions and will remain thus until this legislation is passed. I note the Minister of State's comments with regard to credit unions allowing for numerous proxy votes to be held in the hands of one individual. Obviously, casting a vote on behalf of somebody and his or her stated intention - we must assume that would be the case - is one thing but proxy voting goes further than that and many credit unions are concerned about it. This amendment provides that a proxy voter shall not be entitled to act as a proxy on behalf of more than one person.

We are trying to reach a happy medium here. The Minister made reference to the legislation having to return to the Seanad but the Upper House could deal with this in a matter of minutes with a degree of goodwill, as has been the case with legislation that has been sent back from the Seanad to Dáil Éireann. Changes can be approved within minutes so there is a mechanism available if the Minister of State was willing to consider this amendment and I would encourage him to do so.

The 2016 credit union advisory committee published its review of the implementation of the recommendations of the report by the Commission on Credit Unions. The committee noted that proxy voting was a specific concern for stakeholders. Section 11 amends section 82 of the Credit Union Act 1997. It deletes subsection (3) which prohibits members from voting by proxy at a general meeting of the credit union. Section 11 of the Bill before us inserts a new section 82A into the 1997 Act which allows credit unions to provide their members with an option to vote by proxy at general meetings. It also sets out the rules governing such voting by proxy. These include that a proxy would have the same speaking rights as a credit union member and the same rights to vote on a show of hands and on a poll. That is important. At annual general meetings, as we all know from attending our own party conferences, for example, members can be delegated to vote on behalf of the branch they are representing. If members have a free vote, the conversation or debate may have an impact on which way they will cast that vote and may also have an impact on future votes. The issue of speaking rights and the ability to shape the views of people in the room is crucially important. It is important in the context of proxy voters because such voters may not be members of the credit union. The proxy could be somebody who has no right, other than being a proxy voter, to be at an AGM and somebody who has no stake in the credit union movement nationally or locally.

Serious issues have been raised with regard to these proposals, including the fact that proxy voting could lead to conflicts of interest. Furthermore, proxy voters could exercise undue influence on voting, as I mentioned earlier. The possibility of a proxy voter acting as a proxy for several members is what amendment No. 7 tries to address because that could lead to undue influence being exercised by a single individual. The Minister of State argued that proxy voting is being permitted in an attempt to encourage people to attend AGMs but while I acknowledge that other measures in this legislation will do that, proxies cannot do so because proxy voters would be entitled to attend the AGM if they were members of the credit union in their own right. The only way that proxy voting could increase attendance at an AGM is if all of the proxy voters were not members of the credit union and that might not be a good thing. Let us take the example of a credit union AGM at which 20 people turn up. People have the right to attend if they are members of the credit union so the only way the attendance could be increased is if those attending were not members. We do not want to see a situation where there are 30 proxy voters who are not members of the credit union outnumbering the members, even though they are acting on behalf of members. The Minister of State should bear that point in mind. Concerns have been raised and this amendment would address one of those concerns by ensuring that a proxy cannot act on behalf of more than one person. This would avoid the situation in which one person could act as a proxy for several members. It is a reasonable proposal and I ask the Minister of State to show goodwill and take it on. We are supporting this legislation but there is a bit of concern around this issue. The Minister of State said that we can monitor what credit unions do in terms of changing their own rules but we need to be a bit careful here. Limiting proxies to representing one individual will reduce some of the concerns around this issue expressed by credit unions to me and others.

We are all supportive of the credit unions and believe they will run their organisations as best they can. That is why we did not want to be overly-prescriptive by limiting proxy voting such that a proxy voter can only act on behalf of one person. I gave the example earlier of an elderly couple who want their son or daughter to represent them both at the AGM. The Deputy is suggesting that one half of the couple can be represented by the family member while the other half will have to call on a neighbour or someone else to act as a proxy. I see a practical benefit in allowing one family member to represent both parents. The Deputy's intention in limiting proxies is right and we are all agreed on that. The tenor of the debate suggests that we all believe the use of proxies should be limited to a very small number to facilitate issues like the one I just mentioned. We do not want to allow people to gather up proxy votes.

Families are part of the credit union movement. Generations of families have been members of the same credit union but to suggest that one member of a family cannot represent his or her parents who are members of the credit union is a bit too strict. I would be happy to give credit unions the flexibility to decide whether proxies can represent one, two, three or four members or whatever small number they think is appropriate, if they want to go there at all. Some credit unions may agree with the points made by Deputy Doherty. They might believe they would be opening the door too much, that if they allow one this year, it will increase to three and then to five, ten and so on. Some credit unions may decide not to allow proxy voting at all if they are concerned that there could be abuse. Again, we have provided that non-members can act as proxy voters because, as in the example I gave earlier, a son or daughter may not be a member of a credit union but should be able to represent his or her parents. That is just one practical example that springs to mind. There are other examples.

Perhaps I might refine my wording, although I am not sure exactly what wording I used an hour ago. We aim to improve participation at AGMs rather than attendance. I take Deputy Doherty's point; attendance will only be increased if extra people attend and these would be non-members. What we really want is extra participation at the AGMs. There is a real fear that the elderly couple might not go at all. At least if their son or daughter represents them through a proxy vote they can still participate even though not in physical attendance. Somewhere along the line, virtual attendance may be possible. That is what is really behind this Bill. I know a lot of elderly people might not be familiar with this technology but many are now using Skype to talk to their children and grandchildren. Many who we think are not able for things like this are well able and more will become able as time goes on, once they are shown how it works.

I understand the point about limiting proxy votes to one per person. If credit unions are concerned about this, they can limit people to one proxy vote, or even to two or three if they wish. If they are worried about the concept overall, they need not introduce it at all. I feel it is not unreasonable to allow a son or daughter to represent both parents. That is why I do not favour the limit of one proxy vote.

I hear what the Minister of State is saying and the position he has outlined is reasonable. There is, however, an issue with regard to human nature. We see this in different organisations. In most organisations, it is difficult to get someone to stand forward and take on a role, such as the role of director. There are other rare occasions on which someone is trying to get somebody elected for whatever reason. In an extended family there may be seven, eight or nine individuals who have votes at an AGM but no interest in it. There could be brothers, sisters, mothers and fathers who have never attended an AGM in their lives and who have no involvement in a credit union, bar having an account, savings or the odd loan with it. They may not have been involved in the workings of the credit union. This Bill allows credit unions to change their rules in a way which would allow somebody to gather up those votes. In this way, somebody who regularly attends the AGMs may have a weighted power when voting at AGMs. This, in itself, may have a destabilising effect on other members who decide not to do this.

I am conscious of what the Minister of State has said about leaving it up to credit unions to decide themselves but he has not accepted that position on other issues. There are serious restrictions placed on credit unions with regard to other matters, restrictions we would like to be resolved. They are not allowed to design their own models or to decide how they lend or the limits to apply. In this legislation, we move from a position in which proxies are illegal to one in which there is no limit in law on the number of votes a proxy attending an AGM may gather and cast. That is challenging and it is regrettable that the Minister has decided not to accept the amendment, which is very balanced and measured given the concerns of the movement in respect of proxies. For that reason, I will press the amendment.

Amendment put and declared lost.

Amendments Nos. 8 and 9 are related and may be discussed together.

I move amendment No. 8:

In page 11, lines 28 and 29, to delete from and including “48 hours” on line 28, down to and including “provide)” on line 29 and substitute “seven days”.

The Minister of State went some way towards clarifying - if I can use that term - the question of the 48 hours' notice. We believe it is reasonable to amend this provision to substitute "seven days" for "48 hours". Will the Minister of State elaborate on, and put on the record, how he believes this 48-hour period would function? Seven days is fair, given the potential logistical issues when organising meetings. The question of potentially having to create a unique and discrete database of qualified members who are eligible to vote at an AGM has been raised with Deputy Sherlock and me. That could present logistical and technical issues. We would appreciate the Minister of State's observations on that. We believe it is reasonable to request a move from 48 hours to seven days, given the circumstances.

I thank the Deputy for proposing this amendment. It is good to tease out the issue. The decision to allow proxy voting is at the discretion of individual credit unions. If a credit union provides for proxy voting, the legislation sets the deadline for depositing an instrument of proxy. This deadline balances the needs of the member, who is an individual, and of the credit union, which has the resources. It would be an unfair burden and restrictive on credit union members if the deadline was further out from the AGM, giving them less time to organise an appropriate proxy. It should be remembered that when people get notices, they put them aside, think about them and come back to them. It would not be appropriate for the last date to get in an instrument of proxy to be a full week before the AGM. Many people only make up their minds as to whether to go to an AGM over the course of the week. If this amendment is passed, it will be too late to send a proxy if somebody has not made up his or her mind not to attend a week before the AGM.

These questions only arise if a credit union decides to allow proxies in the first place. It all comes back to that. If a credit union believes the 48-hour period would result in an administrative or technological burden and that it would be difficult to process instruments of proxy submitted three days in advance, it can choose not to go there at all. I am thinking of the members. What is at the core of most of what is before us today is a desire to facilitate participation at AGMs. Telling people that they cannot arrange a proxy if they do not have their mind made up more than a week before the AGM moves the balance too far towards making members make their minds up very early in the process after receiving the financial accounts and reports to be considered at that AGM. This measure gives members more flexibility and allows them to make up their minds three or four days in advance of the meeting.

I acknowledge that the credit union's resources might be put under pressure by the need to have the technology in place to allow for this but the balance of resources is heavily weighted in favour of the credit union rather than the individual member. If I am asked to find the balance between encouraging participation at AGMs and acknowledging the administrative burden involved in processing applications for proxy votes, I prefer to keep the balance in favour of facilitating the member up to as late a point as is practicable, that is, two full days. This allows members to make up their minds up to that point. The credit unions will encourage people to get such applications in early, that is to say seven, six, five, four or three days in advance, and not to leave it until the last day. In some cases, the processing of these applications might put an administrative burden on the credit union but I believe technology will ultimately solve that problem. I prefer to give members the greatest opportunity possible to participate either in person or by proxy. Requiring that instruments of proxy be submitted seven days beforehand, and forcing members to make up their minds so far out from an AGM, may have an adverse effect on people's participation.

I understand the point behind the amendment. I hope the Deputy will see that there is a balance between these two issues. Yes, we are putting an extra burden on the credit union, but only to facilitate the members and to give them as much time as possible before the AGM to make up their minds. On that basis, I will not accept this particular amendment, although it was worth highlighting some of the issues that may be involved should credit unions go down the road of discussing the issue of proxy votes.

Amendment, by leave, withdrawn.
Amendment No. 9 not moved.
Question proposed: "That section 11 stand part of the Bill."

On section 11, I want to talk about consecutive terms of appointment to the IFAC. This should not be happening. The members of the council have done an excellent job, including the reports they give to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, of which I am a member. We differ on some issues and agree with others; that is the nature of it. The council gives independent advice to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. It published its report on the fiscal rules, irrespective of how we view those rules. It produces a considerable amount of documentation that never gets discussed publicly but is of great assistance in increasing parliamentarians' depth of knowledge of the fiscal environment in which we operate. The members have served their positions with distinction.

Under the current law a member may be appointed to the IFAC for two consecutive terms. There is nothing to stop them from being appointed-----

I am not sure the Deputy is on the right section.

The reason I just drew his attention-----

May I make my final point so that we can save time on this issue?

We will be out of time in two minutes in any event.

Let me make the point; I have just one more sentence to say. Nothing is preventing them from being reappointed for further terms, but we need to have a break. We need to replenish the board members to retain freshness. It is a crucial body. This amendment is wrong.

I thank the Deputy.

The Government should be able to appoint suitable people-----

Deputy Doherty, just to be fair-----

-----without the need for somebody being appointed three times in a row.

I can give Deputy Nash a few seconds, if he wants to come in on that.

I support Deputy Doherty's position on this, as I enunciated on Second Stage. I hope we can speak on this matter which arises in section 14 and not section 11.

We are finishing up now; I wanted to be fair to Deputy Nash. By mistake, Deputy Doherty spoke to wrong section.

I appreciate that.

We have 15 seconds left if the Minister of State wants to say anything.

We are going on to Report Stage. I may be able to respond to the point then.

We are actually coming to the end completely.

I beg the indulgence of the Leas-Cheann Comhairle. I know leeway has been given. This debate has gone very quickly. Perhaps we could allow a few minutes to hear a response on this issue and then we will be finished.

I do not have discretion on that. This time for the debate was set down by the Business Committee. If I could, I would happily give it, but that is the time that was set.

I do not think anybody will object if the Minister of State goes over time for a couple of-----

It is a matter that has been set out. At the beginning, I warned Deputies that we had an hour. We have only three speakers. I am really sorry; I must bring down the guillotine on it at this point. The 60 minutes are up.

The time permitted for this debate having expired, I am required to put the following question in accordance with an order of the Dáil, which was made on 8 December: "That in respect of each of the sections undisposed of, the section is hereby agreed to in Committee; the Title is hereby agreed to in Committee; the Bill is accordingly reported to the House without amendment; the Fourth Stage is hereby completed; and the Bill is hereby passed."

Question put and agreed to.

A message will be sent to the Seanad acquainting it accordingly.