I welcome the officials from the Irish League of Credit Unions, Mr. Tommy Weir, who will make the presentation, Ms Ann O'Byrne, Ms Carmel Dowling, Mr. Liam O'Dwyer, Mr. Pat Fay, Mr. Jim O'Dwyer and Mr. John Murray. While the comments of members of the joint committee are protected by parliamentary privilege, this is not the case in regard to those made by delegation members. I now invite Mr. Weir to make his presentation which will be followed by a question and answer session.
Irish League of Credit Unions: Presentation.
Mr. Tommy Weir
I thank the joint committee for meeting the delegation this morning. I will first outline some of the background to the problem we face.
The credit union movement has no objection to regulation. Because of its uniqueness and not for profit nature it would prefer to be regulated separately as in the past. It has a long history of self-regulation and imposed management and financial discipline on the movement. This has been achieved through credit unions recognising the need for collective discipline in financial control and management, with the extensive monitoring operations conducted by the league. For example, the league established its own savings protection scheme to protect member savings. Credit unions have built up capital reserves. A mechanism has been put in place for measuring bad and doubtful debts and providing arrangements. The league has developed norms and ratios to measure credit unions' financial performance. Its staff, on behalf of its savings protection scheme, police all of the above.
To support all of these measures the league has put in place a system of training and education as well as other necessary supports such as fidelity bonding, all insurance requirements and a safe mechanism - central investment management - to look after investments and surplus liquidity. All of these structures illustrate that the movement has no problem with regulation and has self-imposed a successful system of regulation. In addition, the league has a memorandum of understanding with the State regulator, the Registrar of Friendly Societies, in order that he and the movement can work in unison to protect member savings. There is a similar relationship with the Northern Ireland Registrar of Credit Unions. As a result, no member of any league affiliated credit union has ever lost a cent or penny since the foundation of the movement in 1958.
In response to representations made by the league board, on behalf of credit unions, and as recommended in the report of the implementation advisory group on the establishment of the single regulatory authority for the financial services sector - the McDowell report - the Bill provided for a statutory position of Registrar of Credit Unions. It will be recalled that the McDowell report recommended that the existing functions of the Registrar of Friendly Societies in relation to credit unions should be brought into the proposed single regulatory authority. The report read, "This should be done in a manner that would recognise and be supportive of the uniqueness of credit unions and would give comfort that their voluntary character would not be threatened by the establishment of the SRA while still addressing the appropriate regulatory and consumer protection requirements that arise." The report gave comfort to us that there would be adequate recognition for the nature, ethos and philosophy of the movement. Consequently, the league worked with the Department of Finance in agreeing heads for the proposed Bill and was happy the Bill, as published, was in keeping with the undertaking reached with the Department, particularly with regard to the independent role of the Registrar of Credit Unions.
Under section 33AA(1)(a) of the Bill, the registrar will be responsible for managing the performance and exercise of the functions and powers of the Central Bank and Financial Services Authority of Ireland under the Credit Union Act, 1997. Under section 33AA(4), the Bill provides that the registrar will not be subject to the control or direction of the regulatory authority in carrying out or exercising the registrar's responsibilities or powers with respect to the registration of credit unions or the supervision of their affairs or activities. As published, the Bill is in keeping with the representations made by the league board. It is expected that the provisions for a statutory position of an independent Registrar of Credit Unions and the continuation of the Credit Union Act, 1997, will be supportive of the uniqueness and voluntary character of credit unions.
At the request of the league, a delegation met the chairman of the interim board and officials on 14 October and was assured that the credit union ethos and philosophy would be recognised by the new regulatory regime and that there was no intent to roll back the agreed legislation. There was concern, however, in the authority on the accountability issue with regard to the regulation of credit unions. Attempts were made subsequently by IFSRA and league officials to deal with this concern. However, it was learned that the Cabinet had approved substantial amendments to the Bill to be proposed by the Minister for Finance. There were concerns within the movement as a result. These amendments were proposed without proper and timely consultation with the credit union movement. They are contrary to and undermine the understanding agreed with the Department of Finance. They are also contrary to the basis on which the credit union movement had been convinced to accept the Bill, as published. At the league's special general meeting in Galway on 16 November credit unions made it clear that we should fight for the Bill to be implemented, as published. We sought and obtained the support of the credit union movement, with the exception of a few credit unions which differ with our approach.
We understand the principal change to the Bill will be in section 33AA(4). The provision in the Bill, as originally published, reads as follows:
The Registrar is not subject to the control or direction of the Regulatory Authority in carrying out or exercising the Registrar's responsibilities or powers with respect to the registration of credit unions or the supervision of their affairs or activities.
It is proposed by the Minister to replace this with the following wording:
In carrying out the responsibilities and exercising the powers imposed or conferred by this section, the Registrar is, through the Chief Executive, subject to the control of the members of the Regulatory Authority and is required to comply with any lawful directions given by those members with respect to the carrying out of those responsibilities or the exercise of those powers.
The league board's understanding with the Department of Finance, which we communicated to credit unions, was that the registrar would not be subject to the control of the regulatory authority. Our understanding was that there would be an independent Registrar of Credit Unions in recognition of the separate, unique and not for profit ethos of credit unions. Our view is that, if credit unions are to be regulated with the same regulatory structure as "for profit" institutions and banks, the nature of credit unions would be quickly eroded in the eyes of the authority, the public, legislators and members. Other changes to be proposed by the Minister include the deletion of a requirement that separate details of the estimated income and expenditure of the registrar be included in the authority's annual budget; that the registrar's annual report be provided to the regulatory authority rather than to the Minister; and that the content of the annual report must be in such form and deal with such matters as the chief executive officer notifies to the registrar, after consulting the regulatory authority, rather than as notified by the Minister.
The credit union movement is seeking to have the Bill's provisions implemented as published. The league has convinced the movement to accept formal regulation as outlined in the McDowell report. This was achieved because the McDowell report recognised the uniqueness of the credit union movement and an understanding was reached in developing the Bill with the Department of Finance. We believe that the IFSRA contentions regarding the accountability of the registrar are unfounded because the Bill provides the following: that the registrar is appointed by the authority; the contract period is five years and it is open to the authority not to renew a contract; the Minister must approve the appointment; the authority may remove from office the person appointed; the authority determines the remuneration and expenses of the registrar; the authority can determine the registrar's conditions of employment; the authority shall from time to time issue to the registrar guidelines in regard to a complaint made by a person to the Director of Consumer Protection with respect to the conduct of a credit union; the registrar is required to provide the consumer director with information and assistance in respect of a complaint made by a person to the director with respect to the conduct of a credit union; the provision of funds to the registrar to carry out his or her responsibilities and exercise his or her powers is subject to such conditions as the authority thinks fit to impose; the registrar is required to provide the chief executive with such information relating to the performance and exercise of the registrar's responsibilities and powers as the chief executive requires from time to time; the registrar must provide a draft strategic plan to the authority for its approval prior to each financial year; the plan must specify the registrar's objectives, nature and scope of activities to be undertaken, strategies and policies for achieving those objectives and targets and criteria for assessing the performance of the registrar; the registrar must comply with the requirements of the authority with respect to the form of the plan; the authority can approve, amend, or not approve the plan and, following approval, the registrar is required to take all reasonable practical steps to implement the plan; the registrar must keep proper accounting records and they must be in accordance with any accounting standards notified to the registrar by the chief executive; and the registrar is required to make the accounting records available at all times for inspection by any member of the authority.
Consequently, it is the credit union movement's contention that the Bill as published provides all the necessary accountability that could reasonably be expected by the authority. The proposed amendments are unnecessary in our opinion as the authority already has sufficient control. Importantly, the intention to move the proposed amendments is contrary to the understanding we reached with the Department of Finance and the Minister. It is not in accordance with how the league has convinced the credit union movement to accept IFSRA regulation and, if the Bill is so amended, we believe the ethos of the credit union movement will be eroded and eventually severely damaged.
This is a voluntary organisation with thousands of volunteers working around the country. We have no problem with regulation. The 1997 Act covers every aspect of regulation and control within the movement. However, when there are thousands of volunteers to be included with other financial institutions, people may become dismayed with what is being done. Some 560 credit unions have been set up in parishes and communities around the country. They have made those communities better places for people living there. They provide finance and help people to help one another. We have provided thousands of jobs around the country without getting one penny from the Exchequer. We never said a word about that but carried on doing good. We are looking for the protection of the ethos and philosophy of this movement, and nothing else. We have no problem with legislation, whatever may come our way, but we do not want to be perceived in the same light as the "for profit" organisations.
I thank Mr. Weir for his presentation. I apologise for the late start to the meeting and acknowledge that the delegation was here on time. I know members would like to ask questions and I call Deputy Richard Bruton.
Thank you Chairman. I thank the League of Credit Unions for making the presentation to the committee. Fine Gael believes that the model set out in existing legislation is the best way to go because it allows some strategic influence over the way in which regulation is carried out by the new authority, is not too intrusive with regard to the affairs of the credit union movement and preserves intact the independent regulator, traditionally the Registrar of Friendly Societies.
We are at a disadvantage in that we have not seen the Minister's amendments; I understand he proposes some 250 amendments to this Bill. However, this meeting might be most useful if some of the devil's advocate questions were put to the delegation so that we can see how the league would respond to the case the Minister will doubtless make when he presents the amendments.
I am interested to hear the league response to the case that will probably be made that the credit union's future development will involve the introduction of many new services similar to those offered by the commercial institutions. Financial prudence would demand that in respect of some of those there would be the same liquidity requirements, reserve requirements and prudential back-up requirements applied in both sectors. Are there areas where the league accepts that regulation will change under the influence of the new Act to reflect the new services credit unions are developing? Does the credit union movement welcome that regulation? What regulation does the league envisage becoming necessary and appropriate over the coming years? I would also like to know what dangers are expected by the movement from the new structures the Minister seems to envisage.
What new impositions does the delegation fear will be imposed on the movement if credit unions are treated the same as profit-making institutions? We need to understand the substance of the movement's concerns as well as the principle of not being brought under the same tent as the "for profit" groups. It is the nature of this business that we will have to forge some sort of compromise with the Minister, if he is unwilling to change. We need to understand the absolute protections the credit union movement must have and where it might be able to cede some ground. I need to hear more about where the delegation thinks the shoe will pinch if the system as envisaged by the Minister goes ahead. What impositions are unacceptable and inappropriate to the credit unions? Perhaps protection can be found in the legislation even if we cannot get the Minister to change his mind on the amendment cited here.
I could answer the Deputy by saying that the fear of the unknown is our main concern, but that may not be good enough. There is provision in the existing Act for changes, due to the introduction of additional services, to be made. Section 48 of the Credit Union Act, 1997, provides for additional services to members and allows for changes to be made to it in the event of such services being offered. The registrar has taken that on board and has laid down conditions in relation to new services that may be offered. A new service has to be agreed by the registrar before it can be offered to members. Credit unions cannot decide, in their own right, to offer such services. The existing services that are offered - everyone knows where they are - are taken into consideration.
It is obvious that the banks are objecting to many of the activities of the credit unions and they are taking their complaints to Europe and elsewhere. The Irish League of Credit Unions believes that the Irish Financial Services Regulatory Authority, which is controlled by the Central Bank, is heavily loaded in favour of the banking side. The fact that the banking sector does not like the credit unions may mean that we will lose out in terms of our ethos.
What are the issues about which the banks are attacking the credit unions?
The banks are attacking us on our core business of offering loans to members. They have objected to the way in which we present our APR and our interest rates and took us to Europe on the consumer credit issue. Banks, which can afford to spend millions on whatever they like, are challenging a voluntary organisation. We are concerned about the establishment of a regulatory regime which, in our opinion, supports the operations and the ethos of the banks in many ways. We fear that the efforts of thousands of volunteers over many years will be wiped away and that small credit unions will become non-existent. In many cases, credit unions which run into difficulty will be closed down if we take a hard-nosed approach. The credit unions already run a system of protection as part of the great service that is provided for the community, but this service will be lost if a new approach is taken.
The banks have closed down their operations in villages and small towns and it is vital that the credit unions remain there to offer services to local people. Many people would face financial difficulties if the credit unions were not there to provide some small assistance. I fear that the ethos of the credit union movement will be eroded and that smaller credit unions will encounter severe pressure as a result of the conditions that are to be laid down. If one reads the Act, one will see that the board of the IFSRA will be able to dictate to the registrar. I appreciate that it has been pointed out that credit unions will be able to operate within the 1997 Act, but that Act allows for the registrar to make provisions, such as changing ratios, in certain circumstances. If the registrar is told by the board of the IFSRA to make certain changes, I doubt that the credit unions will have any say. We will be told that the changes are to be made down the line.
Ms Ann O’Byrne
Deputy Richard Bruton referred to reserves. Under existing credit union legislation, credit unions have to provide 10% of their moneys - 10% of their assets from the previous September - in statutory reserves. The savings protection scheme contains €80 million at present and, as my colleague, Mr. Weir, pointed out, no credit union member has ever lost a penny or a cent in a credit union. Credit unions must adhere to clear ratios and liquidity figures, which were raised by Deputy Bruton, under the Credit Union Act, 1997. They are well regulated under the 1997 Act.
Mr. Weir mentioned that the biggest problem with the measures being introduced under the Act is that the other financial institutions operate for profit. The credit unions, however, have social principles, one of which is a responsibility to the communities we serve. It is a responsibility we take seriously. My credit union in Blessington set up a social enterprise centre to give young people a start in employment before they move on. We feel that the huge commitment we give to the communities in which we are based is not being recognised. I am not quite as old as Mr. Weir, who has been involved in the credit union movement for 35 years, but I have been involved for over 20 years. It may be argued that we are being emotional, but it is important that we mention the hard work and commitment we have given to the organisation. We do not want to see that work eroded.
The big difference between the credit unions and the banks is that all the money made by a credit union is given back to its members - it does not make any profit. The Irish League of Credit Unions feels that this difference will disappear if credit unions are placed under the same regulatory basis as the banks. The members of the board of the IFSRA are involved in banking and they will not understand our needs and concerns. While we may be protected initially, as time goes by our ethos will be gradually eroded. The largest difficulty that may be faced by the credit unions is that they will be unable to find volunteers. As members of the committee are probably aware, credit unions would not be able to function without the huge commitment of their 18,000 volunteers.
Ba mhaith liom fáilte a chur roimh an toscaireacht ó na comhair creidmheasa atá linn inniu. I apologise to them for the delay in commencing the meeting.
Mr. Weir concluded his presentation on behalf of the Irish League of Credit Unions by stating that "it is the credit union movement's contention that the Bill as published provides all the necessary accountability that could reasonably be expected by the authority". I may shock the delegation before the committee by informing it that I disagree. I do not believe that the Bill goes far enough in dealing with the exploitative banks and financial institutions for which a much more rigorous level of scrutiny and accountability needs to be introduced. I will approach the Bill from that position.
In acknowledging the unique character and independence of the credit unions, I must state that I am proud to be a member of one. It is incumbent on this committee and, primarily, on the Minister for Finance, before the Bill is published, to accept and formally acknowledge the unique character of the credit unions. A reliance on a battleground opening up in the Joint Committee on Finance and the Public Service would be unfortunate and unlikely to deliver the necessary changes, such as the restoration of the position of the regulator of the credit unions, that were envisaged in the original draft of the Bill. The battle has to be won before it comes to this committee. It is likely, unfortunately, that the Whip will apply in any vote and, as a result of this committee's configuration, the battle will be lost. Despite our best efforts to do the right thing, democracy will rule and we will rue the day.
There is no doubt that the credit unions make up a special sector of the financial industry. The voluntary and community commitment that makes the non-profit credit union movement tick has to be acknowledged at all times. It would be wrong to lump credit unions in with the banking and other financial institutions. I speak with some authority on this matter because I worked in that sector for 12 years. It is a contradiction in the first instance and an insult to the decades of voluntary effort invested by many, some of whom have gone to their graves. These people have given stoic service to their communities, most particularly to the least well off for whom the banks had no time.
I spoke recently in the Dáil on this and related matters and I was admonished by a Minister for not mentioning the credit unions. Of course, I concentrated on where I believed the problem lay. I remember coming away confused as to why he had mentioned the matter and it is only now that I realise he was letting the mask slip to expose the direction of the Government's new thinking. That was hidden to me at the time. Deputy Bruton made the point that you have to go beyond principle to get into the nitty gritty of the analysis, but for me principle is paramount. This matter has to be fought and won according to principle because if it is conceded, we will have lost. I come from a different point of view to Deputy Bruton which is not to say that he does not accept the arguments that have been made. He does accept them.
I reaffirm my view that the concerns which have been flagged can only be resolved through direct engagement with the Minister and that has to be achieved at this juncture. As finance spokespersons for our respective parties, we have a role to play in complementing efforts made on behalf of the credit union movement. I would like representatives of the movement to share with us the extent of the contact they have had with the Minister to date and to express what they expect will come of it. Are they satisfied that opportunities are open to them, which has not always been the case right up to more contemporary times? I also have some experience with doors which were not opened. I am anxious to know about access and to discover how this is going to pan out. What progress has been noted so far?
Let us not deceive ourselves. When examining the replies to questions from Deputy Bruton regarding the role of the banks and other financial institutions in challenging the role and function of credit unions and the extent of the efforts they were prepared to make, it is important to recognise that the Minister is unlikely to have dreamed this up on a sleepless night. There must have been a lobby. What do representatives believe the role of banks and other financial institutions has been in seeking the amendment whereby the credit unions are to be thrown into the lumpen mass of the very questionable banking and financial sector?
A tragedy has occurred in my constituency. A prematurely born child has died and I have submitted a request to move, at 10.30 a.m., the Adjournment of the House under Standing Order 31. I apologise in advance because I have to leave in five minutes.
Questions should be held for the moment as some people have to leave at10.30 a.m.
I am my party's spokesperson in the Seanad on enterprise, trade and employment. I have particular responsibility for trade and commerce, under which heading credit unions come. I will engage with the Minister's office on this issue today and do my best to help as much as possible. I agree that the ethos of the credit unions is the polar opposite of that of the banks. I apologise that I must leave to speak in the Seanad at 10.30 a.m., but I will engage with the Minister's office on behalf of those attending this meeting. Ms O'Byrne is right to be emotional about this matter. Much to my horror, the Oireachtas is a man's club and a more feminine attitude is called for. It is quite frightening actually.
Blame the electorate.
Women have to be encouraged to take the risk.
The time will come when there will be more women here. They make up half the population, but only about 11% of representatives. As a person who is used to meeting women in groups like that before the committee, I find it frightening to look around the Seanad and the Dáil. I am disappointed. I will do my best as I have said. I apologise, but I must leave.
We have plenty of women on our board and they certainly hold their own. I am not going to get into this.
It is a struggle.
We are delighted to see that people are concerned. It is an emotional issue, as is anything that is done on a voluntary basis. I appreciate Deputy Ó Caoláin's circumstances. I am from the same part of the country and I am deeply saddened by what took place. We have arranged a meeting with the Minister on Monday next. This is an improvement on the past when we had difficulty in obtaining such a meeting.
Regarding problems with the content of the Bill, I hope that the Deputy does not take issue with section 33, which deals with credit unions.
That is what I was saying.
I understand the Deputy will be supporting that.
It was a shock tactic to get Mr. Weir's attention.
I am prone to shock. I thank the Deputy for his concerns regarding our position, which he has rightly assessed.
In relation to the banking lobby, like the Deputy, we do not know what happens other than what we hear on the grapevine. We have no doubt that there is a banking lobby which takes on the credit unions. As already stated, they have made complaints about us to Europe but we have also had to deal with them at a more local level. The Minister did not wake up one morning and decide that the legislation needed to be changed. Our great disappointment is that we attended various meetings to agree heads of the Bill and came away happy that provision had been made for everything. When the Bill was published, it disagreed with everything we agreed in 2001. There had suddenly been a big change and we had not been consulted, despite that fact that we had already debated the whole matter. We feel peeved and let down about that. We cannot but feel a little concerned.
Please excuse me.
I should have said this before Deputy Ó Caoláin left. He is devilishly clever in the way he presents his message. All doors have been left open to his party and to him for many years.
Like Senator White, I will, as a Government Deputy, be talking to the Minister directly about this matter. I will deliver to him, hopefully in advance of their meeting on Monday, the message of those who have addressed the committee. Mr. Weir and his colleagues may be erring on the side of paranoia in suggesting that the banks are pushing this particular agenda. I know they are very clever at pushing their agendas with regard to the credit unions, but it is important to remember that the European Central Bank is most anxious in relation to this Bill. Given that it is indicating that it wants credit institutions in member states to be regulated by a single authority, the witnesses still need to convince me of the merits of their proposal which points in the opposite direction. How do they envisage regulation occurring for the normal activity of a bank or credit institution? I do not understand how this can be separated from the authority.
It was stated the new institution, the IFSRA, was loaded in favour of the banks. This is an unfair depiction of the role of the new body which is a product of a compromise in that it tries to house two institutions in one. It also asserts the primacy of the Central Bank which has never been hostile to the community and social responsibility model on which the credit union is based. Mr. Weir and his colleagues are being unfairly prejudicial to the new institution which will vindicate the rights of the credit unions and those of the other financial institutions it regulates. How could the credit unions be properly regulated in the light of the fact that the impulse behind moves to regulate centrally comes from Europe as opposed to the banking sector?
Coming from a small provincial town I recognise the importance of the credit union and the great service and loyalty it gives its customers. I am glad it is flourishing. The difficulty here may be a semantic one. As I have no means of independently verifying the information supplied by the delegation, I will proceed on the basis that it sets out the factual position. While the original draft of the provision regarding the registrar is somewhat sweeping, it could equally be argued that the amendment is just as sweeping in the opposite direction.
Nevertheless, there appears to be consensus on the need for accountability. In the light of this, perhaps the credit unions should pursue the possibility of changing the current proposal to subject the registrar to the control of the members of the regulatory authority to one which would make the registrar accountable to the regulatory authority. The question is how to square the circle of independent ethos on the one hand and regulation on the other. I would be willing to propose such a change to the Minister if the credit unions considered such a middle position as a means of getting to the bones of their difficulty.
I apologise for being late and welcome the representatives of the Irish League of Credit Unions, especially my neighbour and friend, Ms Carmel Dowling, who comes from my parish. I am aware of her keen interest in the credit union movement and all it entails.
This is new legislation which has been introduced for many reasons unrelated to the credit union movement, including difficulties which have arisen in the financial sector. Glancing through the Financial Times this morning in a taxi I discovered CNW had been reported to a similar regulatory authority in the United Kingdom for breach of the tax regulations. Governments, therefore, are clearly working towards greater regulation of the financial sector.
Despite the old saying, "Neither borrower nor lender be," I have been both and, therefore, fully understand the workings of the credit union. I come from an area where it has flourished. In Mitchelstown it has been linked with the co-operative movement for decades and provides a wonderful service.
The current regulation has worked well for the organisation. We will have an input to the proposed legislation and I will represent the views expressed by the credit unions at meetings with the Minister as well as party meetings. I do not know what compromise he will be prepared to accept. A few years ago, while in opposition, we succeeded in having several amendments made to similar, far-sighted legislation introduced by a previous Government. This has since worked well for the credit unions. We realise the importance of the credit union movement to the community and worked closely with it at the time.
Credit unions have been regulated by the friendly societies legislation which gives them a different ethos from other financial institutions operating in the private sector. This is the reason for their special role in society. In many areas of the country they operate according to the same principles and ethos as the co-operatives and it is vital these are upheld.
I understand the concerns of the delegation. Ms Carmel Dowling contacted me several weeks ago to get this meeting brought forward and I did so on her behalf. I would be pleased to be kept informed of developments and I am willing to meet local credit unions to discuss relevant issues. I understand one of the biggest credit unions is located in Mitchelstown. I fully understand the concerns of the credit unions. Too much regulation or legislation will destroy the philosophy of voluntarism which drives them.
I apologise for being late. My journey took longer than expected due to traffic. I echo the comments of other members of the joint committee about the contribution made by the credit unions. The delegation has put forward a very reasonable case for two reasons. We are all aware the credit union movement was involved in extensive negotiations and discussions with the Minister and his officials over a protracted period. It has a problem with regard to one part of the banking sector. One banking company, in particular, has made it clear, certainly informally, that the credit union movement competes in an area it would like to enter. On the other hand, the banks are largely withdrawing from the small transaction business, a development I propose to raise with the Minister. I need not tell the committee about the number of communities from which the banks have withdrawn their services.
We are all aware of the pressure under which the credit unions and the post offices operate. As Minister of State at the Department of Social Welfare, one of the areas in which I was involved was an effort to ensure post offices maintained custom in isolated areas. There are very sound social grounds for ensuring legislation is broadly supportive of the credit union movement. While I accept there is a problem in relation to European Union competition law, as alluded to by Deputy Conor Lenihan in his remarks on the European Central Bank, the provision of services of the kind the credit union has made available throughout the length and breadth of the country must not be overlooked.
I have a great deal of contact with credit unions in my area where they are often the only service provider for people who are otherwise not acceptable to banks for lending purposes and other services. This applies particularly in terms of the work frequently done by the credit unions in conjunction with the MABS on behalf of those in financial difficulties who are denied financial services by other providers. The position of the delegation is reasonable.
The other outstanding area of concern is taxation. In fairness to the credit union movement, the issue has been addressed as regards the discussions with the Minister. The development of the office of an independent regulator was proposed for that reason and meets the needs of the movement as set out. I listened to the Minister for five hours the other evening. He is a person of strong and independent views who prides himself on being his own adviser and not listening to the advice of others. As members of this committee we have an appreciation of the role of the credit union movement. We should try to ensure it is encouraged and enabled in terms of the role it carries out.
The query made in regard to the super regulator is reasonable. We are dealing with the regulation of a large banking sector which is very different to the credit union movement. While we might be assured that the registrar would operate in an independent way, nonetheless the overall regulator might be inclined to develop one structure to fit all. That would not necessarily be appropriate for the credit union movement.
I read the material provided by the general league and have had many representations from credit unions around the country. The Labour Party is keen to ensure that the legislation takes the interests of credit unions into account as much as possible. In his early days, John Hume had a great involvement in the credit union movement and he has spoken to me about how we should ensure it is maintained and strengthened in the Republic. I am aware of the problems it has experienced in recent years. While the observations put forward are reasonable, I do not know if the Minister will be prepared to accept them as he is a very single-minded individual.
As a committee member I am happy to press the Minister and continue the dialogue with the officers of the credit union movement. I thank those who have kept me informed on this issue. I do not know if there is another way around the problem but I suggest that the structures, as originally envisaged by the credit union movement, be set up for an initial period of five years. If there are instances of non-compliance then I propose that we could look again at the matter. The question of tax is also an issue. Although it is not directly the responsibility of the credit union movement I am aware it is an area of some concern. I ask for the support of the Chairman and the Fianna Fáil members of the committee for such an approach.
I thank the members for their comments. In regard to Deputy Lenihan's point, I do not believe we are suffering from paranoia.
I just threw out that comment.
I know that was the case, but I wished to answer the accusation. In regard to the ECB, I do not know how well Mr. Duisenberg was informed of what we do here. He was presented with the Bill and he commented on it.
I am very supportive of the movement but I threw that out as a question and a challenge. When we make representations to the Minister, as Deputy Burton has suggested we do, we are sometimes told that Europe is dictating to us and we need to know Mr. Weir's views on that. I hope he does not mistake my motives.
I take a similar approach to the Deputy in that I challenge what is said. We are of the opinion that Mr. Duisenberg may not have been made aware of the role of this movement. He may not even have been given the Credit Union Act, 1997, which would have explained how we are controlled and so on. It would not have been the first time a recommendation made by the EC was disregarded by the Minister. Does the Deputy understand what I am saying?
I take on board what the Deputies have said and the suggestion of Deputy Burton in regard to a five year trial period. At this stage we are open to listening. The mandate which was given to us by the 536 credit unions at the AGM in Galway a few weeks ago is that we fight for the Bill as published. Why is it being changed now? I also accept what was said by Senators White and Mansergh.
I put forward a compromise suggestion. Would Mr. Weir like to comment on it? It seemed to be explicit in his presentation that credit unions are accountable. Does he object to that being stated in the legislation?
Will the Senator repeat the question?
I suggested that to say the registrar is not subject to the control or direction of the regulatory authority is something of a sweeping statement, as is the amendment coming from the Minister which makes the opposite assertion. The middle position, that the registrar be accountable to the regulatory authority, which is suggested in the credit unions' paper, may be the best approach.
The Senator referred to page 3 of our document and there is sufficient evidence to show that the registrar is accountable to the IFSRA board.
That might be the way out of the legislative difficulty.
All of that is included in the Bill as it exists.
The existing Bill may give it——
A vote has been called in the Dáil. We will have to suspend the meeting. Does the delegation wish to resume in 20 minutes or have all the points been covered?
I would like the opportunity to speak.
We will resume after the vote.
The Dáil will be considering Report and Final Stages of the National Development Finance Agency Bill in a few moments. Deputies Burton and Richard Bruton, the Opposition spokespersons, have to be present in the House with the Minister. There will be a vote in the Seanad.
I welcome the Irish League of Credit Unions. I was pleased to support the letter of invitation when it arrived two weeks ago. I compliment the credit union movement on providing an extraordinary service to the public over so many years in practically every village and town.
There is an obvious difference between the credit union movement and any other financial institution, here or anywhere else in the world. It has the unique characteristic of being a non-profit-making organisation. This should be recognised and understood in debate and in legislation.
In recent years there has been much debate on the role of the Central Bank and many other issues were raised in various inquiries. On more than one occasion there have been calls for an increased role for the Central Bank. These calls were made in light of the fact that the bank had only a provincial role and that no consumer protection was provided. Some people asked why we did not have a regulatory authority with a broader brief. This debate was good, but the Irish League of Credit Unions now feels that its unique position is not being recognised in the new legislation. It is important that its contribution today be placed on record because we will soon be debating the different Stages of the legislation. It is important that we be well informed and have views on the matter.
There should be some recognition of the uniqueness of the credit union movement. I am not certain how that will be achieved, but I am sure today's meeting has been a help in that we are in a better position to know exactly what the movement wants. The credit union movement has never stated that it was not prepared to be involved in a regulatory situation. It has requested a recognition of its uniqueness and there is considerable merit in that request. I am not sure it can be achieved at this time, but there should be some middle ground. I will be putting forward that view and I hope it will be accepted when we deal with the legislation. I hope we will continue to support the movement, of which we should be very proud.
The final sentence of the document stating the concerns of the credit union movement indicates that it has sought and obtained support for the credit union movement with the exception of a few isolated credit unions. Will Mr. Fay explain that to the committee?
Mr. Pat Fay
I have a couple of important points - one of which was referred to by Deputy Conor Lenihan - to make before addressing that issue. The fact that the credit union movement is not a credit institution in the accepted sense according to definitions under banking legislation must be made clear. Credit unions do not deal with third parties. That is the fundamental distinction between credit unions and for-profit institutions. Credit unions deal exclusively with the members who own, control and direct the affairs of those unions. It is critical that this be understood and it is germane to the future regulation of the credit union.
I was delighted to hear so many references to the word "movement". The credit union system is a movement of people. This means that a large number of people - 2.7 million - subscribe to the ideology and ethos of self-help and self-control and regulation of finances. That is in contrast with industries motivated by profit. If one searches the website, one will find that credit unions in other countries, the names of which I will not mention, often describe themselves as industries. We do not subscribe to that view at all. In the countries in question, the credit unions are, in effect, regulated as for-profit financial institutions.
The best example of credit unions of our kind is probably in the United States, where there is a full spectrum of credit unions, large and small. The credit union movement in the United States is regulated by a very clearly delineated structure. An authority is appointed by government, the movement and politicians to form the board of the regulatory regime. Beneath that lies the structure of the credit union movement. It has its own savings protection fund. We have this also and it stands at €80 million and is growing. That is the self-protection element of the system. In the United States, all other financial institutions are separately regulated because they have a different ethos and philosophy. That would be the ideal situation for us. The proposal in the Bill to have a separate regulator or registrar who reports to the Minister goes very close to that ideal. That is a very important distinguishing feature of the credit union movement.
Another Deputy referred to services.
Would Mr. Fay prefer the Minister to be the final link in the chain of regulation rather than the regulatory authority?
That is extraordinary, a point to which I will return later.
I will make another point to prevent myths about the credit union movement being perpetuated. A credit union movement, which has reflected the needs, requirements and aspirations - financial and social - of its members, has grown and evolved in this country over the past 45 years. Consequently, there should be no reason credit unions should not use modern delivery mechanisms. The fact that a credit union might use the equivalent of cheque books or plastic cards as delivery mechanisms does not in any way make it a bank. It is still a credit union, with a basic and fundamental philosophy. The delivery mechanisms simply reflect current needs of members.
Over the years the Government has recognised the uniqueness of the credit union by fighting on behalf of the movement for exemption from the first and second European banking directives and the European consumer credit legislation. It has done this because the credit union is different, it is not regulated for banks and it is not for profit.
Regarding the ECB argument, there are many institutions in member states that enjoy exemptions from banking directives. I do not have a list of them to hand but I can provide one. The Governments of those countries recognise that entities like credit unions must be protected and ring fenced. That is the thrust of our argument.
I am grateful for the last contribution. I think it is fair to say that this committee is fully supportive of the credit union. I do not wish to be facetious, but Fianna Fáil is a movement also and it understands the community and social purpose of the credit union movement. It is a very laudable, worthwhile and wonderful thing. I telephoned the Taoiseach when measures regarding credit unions were mooted and was not shy about expressing myself.
I am worried about the regulation issue. I am not suggesting that the movement's uniqueness and ethos must be maintained, if anything it should be further developed. The Government should adopt a more developed attitude to credit unions and allow them to move beyond lending to individuals and on to lending to small business start-ups.
Deputy Burton has misunderstood the issue. It is not a competition issue; it is a regulatory one. The ECB is more comfortable with Ireland having a regulatory authority and that regulation would be housed within a single home in Europe, in this case the IFSRA. Can Mr. Fay point to examples in Europe where credit union movements will be outside financial regulatory bodies?
I cannot do that now. I can tell the committee the experience of the Financial Services Authority in Britain, which has been implemented since 1 July 2002, and which includes credit unions. There are about 600 credit unions in Britain but many of them are very small and are not as advanced or mature as the credit unions in Ireland. We understand that many of them will cease to exist. They are not sustainable under the burden of regulation.
That the credit union movement fears coming under regulation will add to its costs does not appear in the briefing notes.
It is not in the briefing notes. As the Deputy knows, the Bill provides that moneys collected will not be in excess of the cost of regulation. Despite opposing filing fees before they were introduced, credit unions must pay them and this has been implemented for a number of years. If we are caught up in regulation to the extent envisaged in the Bill, it is likely that a substantially increased burden will be placed on the volunteers. They will have to complete forms of fitness to do the job as volunteers, as directors, supervisors and officers of the credit union. The FSA has produced documents with 30 pages of questions that have to be responded to by volunteers. The volunteers here already comply with the requirements of current legislation.
As vice-chairman of the Joint Committee on Enterprise and Small Business I am very concerned about the burden of regulation. Is Mr. Fay suggesting heavy costs will be incurred in this enhanced regulatory environment?
Yes. Once this kind of regulatory regime is put in place, there is a creeping increase in the regulatory burden. This has been the case in the United States and Canada. Many American credit unions now have to comply with truth in lending and truth in credit legislation. Once this regime is put in place the bureaucracy will inevitably increase.
The Irish League of Credit Unions represents 98% of all credit unions on the island. This excludes 70 credit unions in Northern Ireland that are in the Ulster federation. There are 104 credit unions in the North that are part of the ILCU. The credit unions have imposed rules and regulations on the league and have certain requirements for branches to remain as members. In the past, the league has disaffiliated a small number of credit unions that were in non-compliance with those rules.
Are they based in this jurisdiction?
Is there any middle ground in the stand-off between the league and the Department?
We have a mandate to negotiate on what is in the Bill. We do not have a mandate to go to the middle ground, but that is not to say we will not talk about it. Where is the middle ground for the Minister? We are being asked to move——
The Minister, in my experience, is a reasonable man but I am not naïve enough to think there is not another view of him. Can anything be stitched into the legislation to give greater assurance? The presentation suggested to me that the league is wary about a change to the ethos and whole aspect of the movement. Is there any way in which assurances can be given in the Bill?
We are not here to say that we are not prepared to listen or compromise. That is not in the nature of our organisation. However, we do not even know at this stage whether the Minister is prepared to compromise. We would certainly consider the situation, but we have a mandate from Galway. They were all jumping up and down in Galway saying that this is what they wanted. We would have to go back and eat humble pie to some extent and say that this is the best deal we could get from the Minister on the day and ask them to accept it. We have done that in relation to the negotiations we had with the Department in 2001. We went out and said that we had fought the case and that this was what we had got, and that was accepted by our members. We are now being asked to come back and change our minds again and beg for the indulgence of our 2.2 million members. What they are saying to us is that we have taken our eye off the ball and that we are not with it.
On the matter of how you view the independence of the registrar within the over-arching control of the authority itself, could the Minister give any assurances about the independence of the registrar? It is clear from the very deliberate amendment the Minister has tabled that there has to be some control by the authority over the registrar. In other words, one cannot be fully independent within the institution because there has to be some structure of reporting and accountability. Are there some other qualifiers that could be put in to guarantee that in relation to certain functions within its remit, the registrar's operations are effectively independent?
I cannot speak for the Minister on how he would interpret the word "independent". As far as we are concerned, independent means independent. We have stated categorically in page 3 the relationship between the registrar and the authority. The authority can hire and fire the registrar. What more control can anybody have over an individual? I cannot understand how the Minister can now suddenly discover that the Bill is not right and that the independence of the registrar is not there. I am sure he took cognisance of everything we said in relation to the independence of the registrar when he was drawing up the Bill and considered all of the aspects included in page 3 of our presentation. The registrar was not, in his opinion, as independent as we might have wanted but had some degree of independence. I cannot say at this stage what different decision the Minister will make on the word "independent". We are prepared to listen to any compromise the Minister may advance. Our situation is——
You have a mandate.
I would put two points to Deputy Lenihan. At the moment the registrar reports to the Minister and we are looking for that to continue.
I am aware of that.
Not to the Minister for Finance?
We report to the Minister for Finance.
Through the registrar——
Can I clarify something? Under what Act does the registrar report to the Minister? The registrar was formed under the Industrial and Provident Societies (Amendment) Act, 1978, but that Act does not——
This is the Bill we are dealing with here.
Yes, that is what I guessed you were talking about, my apologies.
Both men are right.
The Deputy raised a point about the ethos and uniqueness of credit unions. That is really what we are fighting on. To go back to what Deputy Finneran said about legislation, we negotiated with the Government for a year and a half. We went to the credit union movement several times. It did not want the IFSRA which was set up because of the deeds or misdeeds of the banks and not credit unions . We did not get all we wanted in negotiations but there was a middle ground then. This middle ground is what was in the Bill. The Government was happy with it and we were happy with it. It was published, it went to the credit unions and now amendments to it have been proposed. If one already has a middle ground in the first instance, there is no other middle ground to be found. The registrar was to be ring-fenced just for credit unions.
It is there.
Yes, but not in an independent situation. It is included with all the other financial institutions reporting to the IFSRA. Bit by bit, as happened in the UK, one comes in under the banking regulations, and our ethos will therefore be eroded. We negotiated the Credit Union Act, 1997, with the Government for more than five years. Again, we did not get everything we wanted but we agreed and signed off on it. We live within that legislation. Bringing us in under this new authority is to bring us in with every other financial institution that is profit making. With unemployment figures on the way up again we need the credit unions with their ethos and philosophy of helping communities.
Somebody made the point that the banks are once again turning away small lenders. We were there when we were badly needed and got rid of many of the money lenders, but the money lenders are now creeping back into our communities again. The credit unions cater for those people, they allow people in large and small communities to get a bit of control over their lives and finances. We fought so hard for what we wanted in this Bill and got it from the Government, but then it fails to even notify us that an amendment is to be tabled. Surely if one agrees on something with somebody, it is common courtesy to tell them the agreement is due to be changed. We cannot go along with these changes. We have to fight for what we got. I suppose there may have to be a compromise at the end of the day but one fights for the top. Does the Deputy understand what I am saying?
I do, absolutely.
Look at what the good credit unions do and have done in the past 40 years. When the history of the last century is written, the contribution of credit unions to this society will receive acknowledgement.
We are all at one on that.
Are there any further questions?
The Bill has passed Second Stage in the Dáil and Committee Stage is due to be taken. I understand, Chairman, that you are to meet the Minister next Monday. He will give you a fair and reasonable hearing and I am quite sure he will take into consideration the views of the leaders of the credit unions and other community representatives. I have no doubt we will be hearing back from him and from you. Committee Stage will be taken in this room and amendments to the Bill will be tabled. I have no doubt that Opposition Members will take up the various points.
I thank the representatives of the Irish League of Credit Unions for attending. It is difficult for me, as a Government Deputy, and for my colleagues to give full assurances because we are subject to the Whip. However, we are very much on the side of the Irish League of Credit Unions. We look forward to liaising with it and ensuring that the ethos to which its representatives referred is maintained, developed and enhanced. It should not be thought that we are trying to end that. The history of my party, and that of all the parties represented here, shows that Members are in no sense spokesmen for the banks. We take on board the ideas about the ethos of the movement and the need to maintain it. We need to get guarantees that it will be maintained.
I agree with and understand the uncertainty about this new regulatory authority and the need for, if not changes to the Bill, very tight assurance that the authority will work to maintain the interests of the credit union. Assurances that it will not, as the credit union spokesman indicated, become a creeping form of bureaucracy and an instrument of further regulation involving a higher cost base which will make credit unions uncompetitive, relative to banks - which are always trying to enhance their own deposit base - are also required.
To clarify what has already been said, Committee Stage will probably be taken in early February. I do not think it will be dealt with in January, because the committee will be dealing with other legislation at that time.
Mr. Jim O’Dwyer
Let me mention a few matters which might be helpful to Members in considering this matter.
A constant theme running through our discussion this morning is the voluntary nature of credit unions. The Irish League of Credit Unions has a solemn duty to protect that and will make every effort to do so. It perceives the changes being proposed as a danger to that voluntary ethos. That is from where the Irish League of Credit Unions is coming. In the words of an American President, the business of Government is to do the business of the people. In this instance, we are talking about the business of the 2.7 million people who are members of credit unions. It is their business and the services provided to them by credit unions that the Irish League of Credit Unions has a duty to protect. That is a theme with which no person at this meeting and no Member of the Oireachtas would quarrel.
To continue on to the issue of the middle ground, when is the middle ground achieved? Is it when 100% of the ground is divided into a middle ground, or is 25% the middle ground? As realists, we know that is what happens in real life. When an organisation of the repute of the Irish League of Credit Unions enters, in good faith, into discussions with an equivalent organisation of high repute and integrity, namely, the Department of Finance, and they debate the issues and arrive at a middle ground, that middle ground represents two things. From the perspective of the Oireachtas, which makes the laws in this country, credit unions will be included in the new single regulatory authority. That is one part of the middle ground.
Credit unions have never, either before this was decided or since, had any hand, act or part in any of the transgressions that led to the introduction of increased regulation and the establishment of a single regulatory authority. A single regulatory authority was being created and it happened that credit unions were to be included in it together with all other institutions. Credit unions never have and never will complain about regulation. They are, as has been proven in the past, supportive of it.
One part of the middle ground that was achieved in good faith over a protracted period between two very honourable parties was that credit unions would be included in the new single regulatory authority. The second part of that middle ground was that, as recommended by the McDowell report, a registrar of credit unions was to be appointed within that new single regulatory authority and that registrar was to be independent. That was a given and was part of the middle ground.
The Bill was then drafted and published and delivered the middle ground. The Irish League of Credit Unions communicated to its members that the understanding it had reached with the Department of Finance in good faith had been delivered. Subsequently, and not too long ago, the Irish League of Credit Unions discovered that the interim IFSRA had some difficulty with the Bill in relation to the accountability of the registrar and had convinced the Minister for Finance that the legislation should be amended to take account of its concerns. This happened without consultation with the Irish League of Credit Unions which had, in the first instance and in good faith, reached a middle ground with the Department of Finance.
I will conclude in a moment by mentioning something to the committee in relation to the European Central Bank. The latter had also been in touch with the Department of Finance in relation to the Bill as a whole, but, in particular, in relation to a part of it relating to credit unions. As a result, the Minister has brought forward the proposals. That is not to say that there was no consultation between the Department and the Minister on the proposals. The point is that at the time the authority appears to have convinced the Minister of its position, there was no consultation with the Irish League of Credit Unions.
The Irish League of Credit Unions entered into difficult discussions in good faith and a middle ground was reached. Now it is being put to the league that perhaps there should be a reduced middle ground and that it should agree to a dilution of the independence of the registrar of credit unions which had been promised in the first instance and had been inserted into the Bill. If there was no problem at the time the Bill was published, why should there be difficulties at this stage? Why has it surfaced in the meantime?
The issue of accountability and the balance to be achieved was discussed at the time when that middle ground was achieved. The balance between independence and control was achieved in the Bill and the elements of that balance are listed in the presentation made to the committee, for example, the registrar is appointed by the authority and so on. I submit that under the Bill as it stands, there is ample control in relation to the registrar's operations in the context of achieving a balance between independence and the need for control.
The European Central Bank, in its opinion to the Department of Finance on 5 June 2002, made various statements in a very erudite and clear way. In relation to credit unions it asked a question, and I invite the members of the committee to compare what the European Central Bank asked for with the proposed amendments. I am not suggesting that we reach any conclusions about that matter today. The European Central Bank said that it is unclear whether the Governor would enjoy a sufficient degree of control over the supervisory decisions of the autonomous registrar in order to protect the Central Bank's independence. It further stated that the legislation should explicitly clarify that the supervisory decisions of the Registrar of Credit Unions, as a constituent part of the Central Bank, would be subject to the same degree of financial stability oversight by the Governor as is proposed for the regulatory authority. I invite the members of the committee, and any reasonable person, to compare that question with the proposed amendments to see how they square with each other.
Does anybody want to make any final comments?
We thank the members for their indulgence in meeting us this morning. Does this committee sit now to discuss the issues we raised this morning?
I understand the report of the meeting will be sent to the Minister and the Department of Finance. We just had a discussion today. We will not meet when the representatives leave to discuss matters and make a recommendation. What is said in the exchange is the full——
So there will not be any recommendation from this committee to the Minister?
No, but we will forward him the full views expressed by the members and yourselves without a recommendation. That is my understanding.
It is entirely open to us to make recommendations——
That is what I am asking.
——should we feel so moved but I would remind Mr. Weir that this item will come through as legislation and when we are in joint committee mode we proceed, generally speaking, by way of consensus. In fairness to the Chairman, what he is trying to say is that as a joint committee we proceed more or less by consensus, as in Government and Opposition.
What will happen as a result of this is that when the legislation comes to Committee Stage, which will not be before Christmas, as I have indicated, different members of the committee will bring forward various amendments, as will the Minister. There will not be a unified single view taken.
When we were coming here this morning we thought we would make our case to the committee and that the committee would then decide on our presentation. It appears now that members make their own individual——
Each party will come to its own conclusions.
I accept that. In conclusion——
On a point of clarity, part of the confusion is entirely of the making of the Oireachtas. We are really two committees in one. As Dáil Deputies we sit on a select committee and Deputy Fleming is chairman of that committee also. That select committee deals only with legislation passing through the Houses. In our legislative role as a select committee, we will examine the issues raised by the delegation and amendments will be tabled, mainly from the Opposition but some will come from the Minister and some from ourselves, if we feel so moved. The delegation is speaking to us today as TDs and Senators in a joint committee which can examine policy and make recommendations. If, in private session, we felt moved to so do, we could ask the Minister to examine this or that. The Chairman is indicating that we will move in that direction in that we will ask the Minister to note these concerns. I will recommend in private session that the point about the ethos is the primary point. I understand we are talking about a movement with members who have mandates and who vote on certain issues. There is now a different proposal on the table and I understand there is open and middle ground and an ability to compromise on the part of the league. I hope we will recommend to the Minister that he will explore that aspect because that is what the meeting on Monday is all about, namely, to explore the possibility of a middle ground being discovered which will address the substantial point, namely, the ethos, not where the league is housed or how it should be regulated. That is my understanding.
I appeal again to each member of the committee, regardless of a Whip, to support our case and to strike a blow for the volunteers and the communities we represent. We heard all morning about the good we are doing. Everybody tells us we have been doing great work for the past 40 years but all of sudden we see something coming down the track which will hit us in the teeth and makes us feel it has been a waste of time. In opposing these amendments, members will be safeguarding the interests of one of the great success stories of this country, the credit union movement. We have no problem with profit making organisations. They have their own role but we ask members to stand up to them in that they are continuously trying to undermine this movement. We ask members to stand up for the ethos and the philosophy for which this movement stands. I thank members again for their time.
The representatives only have a problem with one or two sections of the Bill.
We have a problem with the amendments being tabled.
Yes, but the main section they are concerned about is section 33.
That is right, which deals with credit unions.
So they are looking for a compromise on that?
No. We have made our case quite clear——
I know they have.
——in that we have a mandate from the members, and that is where we stand. We are not saying here and now that we will stick our heads in the sand and not listen to something, but we are not here for a compromise. We are here to make our case as laid down at the AGM in Galway. That is our mandate and our members said that if we cannot get what we want, we were to go back to them and we would get it at local level.
The representatives obviously want to achieve some middle ground rather than a compromise.
Deputy O'Keeffe is mentioning middle ground all the time. We were in the middle ground all the time——
We were there.
——as already outlined earlier. We were there but all of a sudden there is no middle ground and we are being left on a ledge.
I know Mr. Weir is a reasonable man but I also know he is in the money business so I would say he does a little wheeling and dealing.
I am sorry if I intruded on the debate. I am not a member of this committee. I am a newly elected Deputy from north Tipperary. Frank Lynch, the former president, was a personal friend of mine.
Is the Deputy a member of a credit union?
I am a member of Nenagh Credit Union——
——and proud to be so. I was at another committee meeting at which I noted on the monitor that representatives of the Irish League of Credit Unions were appearing before this committee and I decided to make my way to this meeting. I am disappointed I missed the first part of the debate and I hope to get a copy of Mr. Weir's presentation which he was in the middle of delivering when I arrived.
I support the ethos of the credit union movement. Voluntarism is under serious threat across the country for a number of reasons. Members of the Templemore branch of the credit union wrote to me recently seeking support in this regard. They did not give me a major brief on this matter, which I would welcome. I support the ethos of the credit union movement and want to see it continue. That is as much as I can say to the representatives present because I am not a member of the joint committee, but I think enough of the credit union movement to be here today. I will try my best - the representatives have my word - to support their cause.
We appreciate that the Deputy came to this meeting to support us, even though she is not a member of the joint committee. That is all we are asking for here. Irrespective of whether members are answerable to a Whip, we ask that they support what we are seeking. We are not looking for the end of earth. We want to ensure the movement will continue in the way it has operated for the past 40 years.
While I appreciate that we are in the money business, we have only €7.6 billion in savings among 2.5 million members across 534 credit unions. That boils down to small savings, in the region of €1,800, on average, per member.
What is the amount of the movement's savings?
We have €7.6 billion in savings throughout the country.
We reckon that our total assets are currently €8.7 billion.
In liquid assets?
What is the movement's liquidity?
That is the value of the credit union movement.
Is the figure of €7.6 billion the amount borrowed?
No. The figure includes deposits, reserves and so on. The best way to describe it is assets.
What is the number of credit unions?
There are some 534 in the league.
There are 2.7 million members.
What is the movement's total lending?
Total lending is 70% of total assets.
We will conclude at this stage. I thank the representatives from the league for appearing before the joint committee and giving members an informative presentation. There are a variety of views among members. I thank the representatives for giving of their time and apologise again for the late start and the interruption of the meeting due to a vote in the Dáil which was outside our control. We have had a lengthy and fruitful discussion. We will discuss the matter again in early February when we come to deal with Committee Stage of the Bill and the various amendments - perhaps amendments to amendments - that will be tabled. I thank the representatives for coming to the meeting.
We should watch this space.