Amendment No. 1 is in the name of an tAire. Amendments Nos. 1, 19, 24, 26 to 38, inclusive, 47, 49 and 50 are related and will be discussed together.
Credit Union (Amendment) Bill 2022: Committee Stage
Sections 1 and 2 agreed to.
SECTION 3
I move amendment No. 1:
In page 5, to delete lines 23 to 35 and substitute the following:
“3. Section 2 of the Principal Act is amended, in subsection (1)—
(a) in the definition of “officer”, in paragraph (a), by the insertion of “a member of the appellate body referred to in section 37,” after “a member of the board oversight committee,”,
(b) by the insertion of the following definitions:
“ ‘Act of 2014’ means the Companies Act 2014;”.
The amendment, as the Leas-Chathaoirleach said, is grouped with all of the amendments in group 1. The grouping addresses the following issues collectively: expanding the definition of an officer of a credit union to include a member of the appellate body, which is referred to in section 37; changes to the functions of the board to remove some of the administrative and operational tasks from the board to allow it to focus on strategic planning and development; technical amendments to clarify and tighten the language of the Credit Union Act in relation to the following areas - the board structure, make-up and governance of credit unions and corporate credit unions, reporting to the credit committee, some modernisation of the language of the Credit Union Act, election of the board oversight committee, the eligibility of a CEO to be appointed to the board of directors, reporting rule changes to the Central Bank, compliance reporting to the Central Bank, decisions made by the board in relation to some additional services, the make-up of the nomination committee and the functioning of a corporate credit union.
I have no problem with the group of amendments and, obviously, welcome the legislation as well. I have an issue in relation to amendment No. 1 as the way it is drafted will create problems in terms of the Bill. I would ask that the Minister of State withdraw amendment No. 1 and submit a reworded amendment on Report Stage in relation to that amendment.
The amendments are fine. The thrust of this is to try to free-up board members' time to focus on strategy as well as involve the officers a lot more. That makes total sense to me.
The general thrust of this Bill is around trying to strengthen the work of the credit unions, strengthen the roles they have and the services they provide but also making it somewhat more encouraging for new additional board members.
There is a lot of work involved in being a board member of a credit union. We have seen over the past ten to 15 years that there is a lot of commitment, work and training involved, and a lot of continuing professional development, which is fine. If we can refocus things slightly so that board members can put more time into direction, strategy, developing services and reaching out to the community, that will be beneficial. Overall, these changes are welcome and I agree with most of them. Some of them are technical in nature. The Minister of State has my full support.
Deputy English is right in saying that a lot of this is technical in nature. In response to the point raised by Deputy Doherty, the purpose is to allow additional expertise to be placed on the board. As was said, the sector is getting more streamlined and more professional and it is important that boards are able to bring in additional expertise where necessary or appropriate. The broad thrust of this is to provide the best enabling environment for credit unions and to allow them to make their own decisions thereafter. Different credit unions, by virtue of their size or their desire to develop, will take different approaches and we are simply trying to provide the best enabling environment, in consultation with all of the representative groups and the Central Bank, who have worked in a very collaborative way on this legislation. That is the purpose and that is the approach we have tried to take at every instance.
It is important the Minister of State withdraws amendment No. 1 and resubmits it on Report Stage with the correct numbers. The amendment, were it to be accepted today, would make the section confusing and lead to serious problems. It deletes lines 23 to 35 but there is no line 35 in the legislation on page 5. The amendment would actually delete the definition of company corporate credit body and public body and would go on to state what a public body is, but without the definition. There is an issue with the drafting of this amendment. As I said, I support the spirit of it. I do not think it can be amended here on Committee Stage as is, but there is an issue with it. I suppose to correct it would involve substituting 25 for 35. It would probably read accurately then. I may be misguided but if we accept this amendment now, we will have an issue with the section. Maybe the best thing to do would be to withdraw the amendment and resubmit it on Report Stage with the correct number, 25. Otherwise, we are going to delete the definitions, which I would imagine the Minister of State does not intend to do because by doing so, we would make the section not just confusing but missing a definition of a public body.
We have no difficulty with working collaboratively on this. I am very happy to deal with any issue of that kind on Report Stage. We did not see it in the same way but we are very happy to go back and look at that again. The whole essence of this Bill is collaboration.
That is perfect.
On section 3, amendment No. 1, is the arrangement in relation to the amendment agreed?
The arrangement being that we will withdraw it and bring it back on Report Stage. Is that what you mean?
I asked the clerk earlier if there was an option to amend the amendment on Committee Stage but I understand there is not.
Amendment, by leave, withdrawn.
We will now move on to amendment No. 2. Amendments Nos. 2 to 7, inclusive, are related and may be discussed together.
I move amendment No. 2:
In page 6, line 18, to delete “2014;”.” and substitute the following:
“2014;”, and
(c) by the substitution of the following definition for the definition of “common bond”:
“ ‘common bond’ means a common bond falling within subsection (3) or (7) of section 6;”.”.
This amendment is grouped with amendments Nos. 3 to 7, inclusive. The grouping addresses the following issues: the expansion of the definition of "common bond" to include the common bond of a corporate credit union; the modernisation of the language in the Credit Union Act regarding the objects and purpose of a credit union; the establishment of a corporate credit union and the definition of its common bond; and provision for a credit union to provide either a description or a map of its common bond on its website. That is the broad thrust of this set of amendments.
Amendment agreed to
Question proposed: "That section 3, as amended, stand part of the Bill."
I wish to speak to section 3. There are only a few sections in this Bill that I would like to speak to because, overall, my party supports this legislation and I assume all members of this committee also support it. It is very timely and worthwhile and I know the credit union sector supports it as well. A lot of work has gone into it, including by the Minister of State and her officials, and that is to be commended.
As we go on to different sections, we will look at how a credit union applies for registration with the Central Bank. I ask the Minister of State to clarify the situation with regard to when a corporate credit union is applying to be formed. Will she step through the application process, particularly from the Central Bank's point of view? I ask her to clarify the steps that will take place. If my question is a little confusing, perhaps the clarification could be provided to us in writing before Report Stage. That would be helpful. I am interested in understanding the steps the new corporate credit union would take but, more importantly, the steps the Central Bank would take. There has been friction between the Central Bank and the credit union movement in the past and, in that context, I would like clarity on the steps involved and to hear the Minister of State's understanding of the legislation in terms of how a corporate credit union would step through this process and the timelines that may apply.
I cannot do that at this stage because it is a regulatory matter for the Central Bank to set that out. It would be premature for me to do that. As the Deputy knows, we have been working with the Central Bank very collaboratively on every aspect of this legislation but it is for the Central Bank to set down regulations governing the processes. Therefore, I cannot answer the Deputy's question on this occasion because it is for the Central Bank to answer it and I cannot answer it before Report Stage either.
What I can say is that the Central Bank is very open to engagement and consultation on this and I would encourage Deputy Doherty to have that dialogue with the Central Bank. My officials and I will do everything we can to facilitate that. I cannot answer the Deputy's question today or before Report Stage because it is a matter for the Central Bank.
The Deputy is correct to identify that there have been questions with the Central Bank. It is really important to highlight the fact that, alongside this legislation, we are enhancing the stakeholder forum for credit unions with the Central Bank. This is an ongoing conversation that is happening in tandem with this legislation. It is important to highlight that because the Deputy is correct to identify some of those issues. However, I cannot address them in the legislation.
That is fair enough. We recognise the independence of the Central Bank in performing its functions and duties vis-à-vis regulation and supervision. There has always been a question in relation to the credit union movement and a need for a memorandum of understanding between the movement and the Central Bank to understand the process. As we develop a new process in legislation, it is really important there is a clear understanding between both parties, between the Central Bank and the credit union movement, as to what is expected, the timeframes involved and how to resolve any potential issues that may arise during this process. It is important it is seamless. The stakeholder forum is very important but I just wanted to use the opportunity provided by the debate on this legislation to make that point.
We can have conversations around the development of relationships but the thrust of this legislation as it developed over the past couple of years, and certainly the conversations around it, have been focused on strengthening the relationship between the credit union movement, the Central Bank and the Department. Certainly in the past 12 months, that relationship seems to have developed a lot and this legislation facilitates that. The forum and the memorandum of understanding will help as well and enhance the relationship. It is clear from Deputy Doherty's comments, my own comments and those of the Minister of State, that this is what we all want. We want to recognise and strengthen the role of credit unions and make it easier for them to do their work while ensuring transparency around rules and regulations is in place. We want to enhance and develop the relationship, and that is the aim of this and other legislation. We want to enhance how credit unions work, who they can reach and serve, and enhance the services they provide to existing community members but also to those who might miss out because of where they live or because they are an SME. That is the thrust of it. Our desire is to ensure the Central Bank is part of this and it is my understanding, having listened to the Minister of State, that the bank is fully behind these changes, which is positive. We must, at all times, recognise that. I remember a time, ten or 11 years ago, when the relationship was not the healthiest and we must take every opportunity to strengthen it.
Deputies are correct. A memorandum of understanding between the Central Bank, the Department of Finance and the Credit Union Advisory Committee, CUAC, is being drafted. CUAC has a strong role to play in this at all stages. I am aware the International Credit Union Regulators' Network, ICURN, review is under way at the moment and the work by the Central Bank is important in tandem with this. It is important for us to recognise the independence of the Central Bank, as we have, and its high standard of regulation, as well as the diversity in the credit union movement which includes financial institutions of different sizes and scales that require a nuanced form of engagement which provides the best support to credit unions while also providing robust regulation that protects members. That is the thrust of what we are trying to do with this amendment and the Central Bank is also keen to ensure it works in an appropriate way.
Question put and agreed to.
SECTION 4
I move amendment No. 3:
3. In page 6, to delete lines 21 to 25 and substitute the following:
“(a) in subsection (1), by the substitution of “Subject to subsection (6), a society may be registered” for “A society may be registered”,”.
Amendment agreed to.
I move amendment No. 4:
4. In page 6, between lines 26 and 27, to insert the following:
“(i) by the substitution of the following paragraph for paragraph (a):
“(a) the promotion of the accumulation of savings by its members;”,
(ii) in paragraph (d), by the substitution of “the use of money” for “the wise use of money”,
(iii) by the deletion of paragraph (e), and”.
Amendment agreed to.
I move amendment No. 5:
5. In page 6, to delete lines 27 to 32 and substitute the following:
“(iv) in paragraph (f), by the substitution of “of the well-being of the members’ community; and” for “of the well-being and spirit of the members’ community; and”,”.
Amendment agreed to.
I move amendment No. 6:
6. In page 6, lines 37 and 38, to delete all words from and including “the” in line 37 down to and
including line 38 and substitute the following:
“each of the following conditions is fulfilled:
(a) the society is formed—
(i) for no object other than—
(I) to provide services to those credit unions and their members,
and
(II) the objects specified in paragraphs (a) to (c) of subsection (2),
and
(ii) for no other purposes beyond those specified in paragraphs (d) to (g) of subsection (2);
(b) each of its members share the common bonds of a corporate credit union;
(c) its rules comply with section 13;
(d) the place which under those rules is, or is to be, the society’s registered office is in the State;
(e) it has in force (or will have in force if registered) such a policy of insurance as is required by section 47.
(7) The common bonds of a corporate credit union are—
(a) that each of its members is a credit union (other than a corporate credit union), and
(b) the additional qualifications, if any, which are stated in its rules to be required for admission to membership of the society.
(8) In ascertaining whether the members of a society share the common bonds of a corporate credit union, in a case in which the society has stated in its rules additional qualifications which are required for admission to membership of the society, the Bank shall have regard to those qualifications.
(9) A society registered in accordance with subsection (6) may promote collaboration between its members and enhance the services provided by its members to their members.”.
Amendment agreed to.
I move amendment No. 7
7. In page 7, to delete lines 1 to 27 and substitute the following:
“(10) Where a website is maintained by or on behalf of a credit union, the credit union shall publish, on the website maintained by it or on its behalf, as the case may be—
(a) a description of the common bond of the credit union, or
(b) where the common bond of the credit union is or includes that specified in paragraph (b) of subsection (3), a map on which the locality concerned is marked.
(11) Where no website is maintained by or on behalf of a credit union, the credit union shall include in its annual accounts—
(a) a description of the common bond of the credit union, or
(b) where the common bond of the credit union is or includes that specified in paragraph (b) of subsection (3), a map on which the locality concerned is marked.”.
I have no problem with the amendment, but I have a question about the numbering. Sections 7 and 8 being replaced with sections 10 and 11. Is something being inserted between them as otherwise we would be going from section 6 to section 10. Is there a rationale for the numbering.
In the sequencing of amendments, it is difficult that they are going into different places.
This is not the amendment, but the subsection. Under section 6, subsections (7) and (8) are being replaced with subsections (10) and (11). I am wondering why.
It is related to the drafting. We are amending the existing credit union Act. We are amending the Act that amended the original Act. It is to do with sequencing in that. The numbers will follow on.
The numbers will change again.
The numbers will work in the consolidated version. This is the problem with this sort of amending legislation. We are amending an amending Act to an amending Act. It does not draft well, but it works in sequence.
Amendment agreed to.
Section 4, as amended, agreed to.
Section 5 agreed to.
SECTION 6
Amendments Nos. 8, 10 to 13, 16 to 23, and 46 are related and may be discussed together.
I move amendment No. 8:
8. In page 8, to delete lines 2 to 10 and substitute the following:
“6. Section 13 of the Principal Act is amended, in subsection (1)—
(a) by the substitution of the following paragraph for paragraph (a):
“(a) in the case of a credit union, other than a corporate credit union, provisions with respect to the matters specified in the First Schedule,”,
and
(b) by the insertion of the following paragraph after paragraph (a):
“(aa) in the case of a corporate credit union, provisions with respect to the matters specified in the Sixth Schedule, and”.”.
This amendment is grouped with others in group 3. The grouping addresses the following issues: changes to the first schedule to take account of corporate credit unions, the inclusion of a new sixth schedule which will set out the rules of a corporate credit union, membership of a credit union, the range of bodies that can be considered for membership of a credit union, provision by ministerial order to designate certain public bodies as being eligible for membership of a credit union, removal of operational tasks from the board of directors, changes to lending processes to allow for loan participation and loan syndication - an amendment to section 36 regarding revised processes for loan approval is currently being drafted and will be brought forward on Report Stage - amendments to section 37 regarding a broadening of membership of appellate bodies and consequential amendments following from the establishment of corporate credit unions which affect a range of sections.
Amendment agreed to.
Section 6, as amended agreed to
SECTION 7
I move amendment No. 9:
9. In page 8, between lines 30 and 31, to insert the following:
“(c) in subsection (5), by the substitution of “in the interests of the proper and orderly regulation of the credit union” for “not contrary to the financial services legislation”,”.
Amendment agreed to
Section 7, as amended, agreed to.
Section 8 agreed to.
SECTION 9
I move amendment No 10:
10. In page 9, between lines 34 and 35, to insert the following:
“(a) in subsection (1), by the substitution of “Subject to subsection (1A), the minimum number” for “The minimum number”,
(b) by the insertion of the following subsection after subsection (1):
“(1A) The minimum number of members of a corporate credit union at any time shall be 2.”,”.
Amendment agreed to.
I move amendment No. 11:
11. In page 10, between lines 5 and 6, to insert the following:
“(d) in subsection (3A), by the substitution of “Subject to subsection (3B) and the rules of the credit union concerned” for “Subject to the rules of the credit union concerned”,
(e) by the insertion of the following subsection after subsection (3A):
“(3B) A member of a corporate credit union shall cease to be a member of the corporate credit union upon ceasing to be a credit union.”,”.
Amendment agreed to.
I move amendment No. 12:
12. In page 10, line 9, after “unincorporated)” to insert “, other than a corporate credit union,”.
Amendment agreed to.
I move amendment No. 13:
13. In page 10, line 29, to delete “the Bank” and substitute the following:
“such other bodies as appear to the Minister to be expert or knowledgeable in matters relating to credit unions”.
Amendment agreed to.
Section 9, as amended, agreed to.
Section 10 agreed to.
NEW SECTION
Amendments Nos. 14 and 15 are related and may be discussed together.
I move amendment No. 14:
14. In page 11, between lines 12 and 13, to insert the following:
“Amendment of section 21 of Principal Act (nomination of property in credit union)
11. Section 21 of the Principal Act is amended—
(a) by the substitution of the following subsection for subsection (3):
“(3) For the purpose of the disposal of any property which is the subject of a nomination under subsection (1), if, on the date of the nominator’s death, the amount of the nominator’s property in the credit union comprised in the nomination exceeds the amount standing specified, on that date, for the purposes of this subsection in an order made by the Minister under subsection (10), the nomination shall be valid to the extent of the amount standing so specified, but not further or otherwise.”,
(b) by the insertion of the following subsections after subsection (7):
“(8) The signature of a person making a written statement referred to in subsection (1) shall be witnessed by 2 other persons.
(9) Each of the witnesses referred to in subsection (8) shall witness the signature of the person making the statement by applying the witness’s own signature to the statement.
(10) The Minister may, after consultation with the Advisory Committee and such other body as the Minister considers appropriate in the circumstances, by order specify an amount for the purpose of subsection (3).”.”.
As the Leas-Chathaoirleach said, this amendment is grouped with amendment No. 15. The grouping addresses some changes to the nomination process and changes to the process for small payments on death. This arose from my concern that the nomination process could be tighter and more aligned to the signing of a will. It will now be required to have two witnesses to the signing of a nomination, neither of whom is a beneficiary. Those witnesses could, for example, be staff of the credit union. It does not create a more onerous set of processes for the credit union, but rather tightens the process, which is an important process to many people who take great comfort in it. It needs to be more aligned with the signing of a will and that is the purpose of those amendments.
Amendment agreed to.
Section 11 agreed to.
NEW SECTION
I move amendment No. 15:
15. In page 11, between lines 17 and 18, to insert the following:
“Amendment of section 23 of Principal Act (provision for small payments on death)
12. Section 23 of the Principal Act is amended—
(a) in subsection (1), by the substitution of the following paragraph for paragraph (a):
“(a) does not in the whole exceed the amount standing specified, on the date of the member’s death, for the purpose of this subsection in an order made by the Minister under subsection (2).”,
and
(b) by the substitution of the following subsection for subsection (2):
“(2) The Minister may, after consultation with the Advisory Committee and such other body as the Minister considers appropriate in the circumstances, by order specify an amount for the purpose of subsection (1).”.”.
Amendment agreed to.
Sections 12 and 13 agreed to
SECTION 14
I move amendment No. 16:
16. In page 12, to delete lines 8 and 9 and substitute the following:
“(c) in subsection (3), by the substitution of the following paragraph for paragraph (a)—
“(a) If a member of a credit union seeks to withdraw savings in the credit union at a time when the member has an outstanding liability (including a contingent liability) to the credit union, whether as borrower, guarantor or otherwise, that withdrawal shall only be permitted—
(i) if the savings are not attached savings, or
(ii) where the savings are attached savings, if the withdrawal of such attached savings is approved by the credit committee or a credit officer.”.”.
Amendment agreed to.
Section 14, as amended, agreed to.
Section 15 agreed to
SECTION 16
I move amendment No. 17:
17. In page 12, line 19, after “member” to insert “of the credit union”.
Amendment agreed to.
I move amendment No. 18:
18. In page 12, to delete line 20 and substitute the following:
“(b) enter into an agreement with one or more other credit unions in accordance with which the credit union agrees to participate in a loan to a member of one of those other credit unions (in this paragraph referred to as ‘the originating lender’) by the originating lender, or
(c) enter into an agreement between—
(i) the credit union and one or more other credit unions, and
(ii) one or more members of—
(I) the credit union, or
(II) one of those other credit unions,
in accordance with which each credit union that is a party to the agreement provides a loan to the member or those members, as the case may be,”:
Amendment agreed to.
I move amendment No. 19:
19. In page 12, to delete line 24.
Amendment agreed to.
I move amendment No. 20:
20. In page 12, to delete lines 26 to 30 and substitute the following:
“ “(2A) The ability of the loan applicant to repay a loan shall be the primary consideration in the underwriting process of the credit union making the loan or participating in the loan, as the case may be.”,
and
(c) in subsection (8), by the substitution of “the Bank may prescribe such other requirements, applicable to loans to which this section relates, as it considers necessary in relation to any one or more of the following matters:” for “the Bank may prescribe such other requirements as it considers necessary in relation to any one or more of the following matters:”.”.:
Amendment agreed to.
Section 16, as amended, agreed to.
NEW SECTION
I move amendment No. 21:
In page 12, between lines 30 and 31, to insert the following:
“Amendment of section 36 of Principal Act (approval of loans)
17. Section 36 of the Principal Act is amended—
(a) in subsection (2)—
(i) by the substitution of “A loan must be approved” for “Subject to subsections (3) and (5), a loan must be approved”,
(ii) in paragraph (c), by the substitution of “credit officer; or” for “credit officer.”, and
(iii) by the insertion of the following paragraph after paragraph (c):
“(d) in accordance with a loan approval process which satisfies the conditions specified in subsection (2A).”,
(b) by the insertion of the following subsection after subsection (2):
“(2A) The conditions referred to in paragraph (d) of subsection (2) are as follows:
(a) the loan approval process has been approved by the board of directors;
(b) the final stage of the loan approval process is the approval of the loan application in a manner specified in paragraph (a), (b) or (c) of subsection (2).”,
and
(c) by the deletion of subsections (3), (4) and (5).”.
Amendment agreed to.
SECTION 17
I move amendment No. 22:
In page 12, to delete lines 32 to 35, and in page 13, to delete lines 1 to 6 and substitute the following:
“17. Section 37 of the Principal Act is amended by the deletion of subsections (2) and (3).”.
Amendment agreed to.
Section 17, as amended, agreed to.
Section 18 agreed to.
SECTION 19
I move amendment No. 23:
In page 13, between lines 18 and 19, to insert the following:
“and
(ii) by the deletion of paragraphs (b) and (c),”.
Amendment agreed to.
Question proposed: "That section 19, as amended, stand part of the Bill."
On section 19, I have been raising the issue of high-interest loans and moneylenders. I tabled my own legislation on this and had the Government bring in some measures in this area. There was a lot of work done by a number of individuals regarding moneylenders and trying to encourage people not to use high-interest loans and instead use some of the other lower-interest loans that are available, including from the credit union. There was a paper done on this issue by UCC academics in 2017, commissioned by the Social Finance Foundation SFF, titled "Interest Rate Restrictions on Credit for Low-income Borrowers". Among the recommendations was this:
In consultation with the credit union sector, the Department of Finance consider increasing the 1% monthly cap on interest rates for credit unions as per Section 38 (1)(a) of the Credit Union Act, 1997, for this type of lending to cater for the significantly greater costs associated with such small lending.
The academic argued two things. First, they said high-interest loans that were being charged by moneylenders at the time were not appropriate, to say the least, and that there should be a cap introduced on them; and second, that we needed to look at the fact that the only cap that applies to interest rates in this State is on credit unions. There is no other cap on moneylenders. There has been a cap on moneylenders in recent years but before this there was not. They argued that the cap on credit unions needs to be looked at again because it was 1% monthly and 12% per annum. Anybody who has paid 12% interest on a car or a holiday knows it is a lot of interest. People should not be paying that and credit unions do not charge that, in the main. If offering a short-term loan, a 1% rate may be challenging for a credit union because of the cost of the loan in the first instance. That is why they argue it should be increased.
I support this section but it allows for the Minister for Finance to set interest rates. It would be an enabling section to allow the Minister to provide an increase in this rate. While I support the increase in this rate in the context of moneylending, we also need to be conscious that a lot of people are using credit unions and the last thing they want to see is their loans going up for normal duties. I do not believe the appetite is there within the credit union movement to do that anyway. Therefore, there have to be safeguards.
In this section, which is enabling legislation allowing for the Minister to set a maximum rate that credit unions can charge on a product, what recourse does that have to the Dáil or to any oversight or scrutiny? It was stated by a previous Minister for Finance, because this issue has been ongoing now for half a decade if not more, that this would be done by primary legislation. It is not being done by primary legislation. This is an enabling provision in primary legislation. That is fine but what is the oversight on this, which is a really important matter in terms of a Minister for Finance in the future increasing the rate from 1% to 5%, for example? I am not saying anybody would but there has to be some oversight. If the Minister of State would not mind, I ask her to talk us through the implications of that section and what oversight, if any, is contained within the section in terms of the Oireachtas.
The requirement is that it would be done on advice from CUAC and there would be a dialogue with CUAC in the first instance. The Deputy's question is related to the Oireachtas. He is right that we are making enabling legislation that does not have recourse to the Oireachtas. My only view of it is that I do not imagine a Minister doing this without a statement being made to the Oireachtas. It is important and the Deputy has identified exactly the quandary that is there as regards trying to keep people away from moneylenders and very high interest rates that are charged and yet not wanting to create an additionally high interest rate environment for other borrowers and lenders. It is a dual problem. I know the Deputy has done a lot of work on it and indeed I have done a lot of work on it in other contexts. It is a difficult question and is one I will be discussing with CUAC. A Minister will do that following a review with CUAC and advice from CUAC. Could I reflect on that with regard to the Oireachtas aspect and come back to the Deputy on Report Stage? I may not make an amendment but I certainly hear what he is saying so I will reflect on it and come back to him on Report Stage.
I thank the Minister of State for her response. I appreciate her comments about reflecting on the issue. CUAC is obviously an important player in this but the provisions of the Bill empower the Minister to make the decision, at the end of the day, even if CUAC is not supportive of it. We just need to bear that in mind. I have said this on numerous occasions. There is one thing across the political divide that I have seen in my 13 years as finance spokesperson for Sinn Féin, and that is that there is broad, cross-party support for the credit union movement. We want to unleash the potential of the credit union movement. I am not suggesting that this would happen but it is important in a provision like this where you give the Minister for Finance the ability to set a rate for lending in a market. As I said, I think whatever Minister there is in the future would do the right thing but there should be oversight, whether that is a resolution before the Dáil or something else. It is a simple mechanism and it would be a safeguard given the importance of the matter. The Minister for Finance does not have that power in any other lending environment. The Central Bank has it and the independence of the Central Bank is sacrosanct in relation to that. I welcome the Minister of State's comments. Maybe she could look at that.
The only thing I might clarify is that the Minister would not be setting but capping the rate. They would not be setting the rate in any way. I appreciate the broader governance question and will reflect on it.
Sorry, setting a cap.
Precisely. It is a slight distinction. Let me reflect on that. I will also speak to CUAC to get its thoughts on the matter.
Question put and agreed to.
Sections 20 and 21 agreed to.
SECTION 22
I move amendment No. 24:
In page 14, between lines 17 and 18, to insert the following:
“(a) in paragraph (a), by the substitution of “the board of directors; and” for “the board of directors;”,”.
Amendment agreed to.
Section 22, as amended, agreed to.
SECTION 23
I move amendment No. 25:
In page 14, lines 27 and 28, to delete “, which is not provided by the referring credit union,”.
Amendment agreed to.
Question proposed: "That section 23, as amended, stand part of the Bill."
I will speak on the section, if that is okay. This is a core part of the legislation, which allows for a credit union to refer a member to another credit union that is offering a service it does not provide.
This is a welcome section that means credit unions are working in collaboration. It does not mean a straight refusal but means that where one branch cannot provide a service, another down the road can do so. People can be referred and deemed a member of that second credit union for as long as the service is provided and only for the purpose of the service for which they are referred.
There are two issues that I want us to look at in respect of this section. Will there be any fees incurred by the member when transferring from one credit union to another? How will that be dealt with, if it will be, and how will it be regulated? I am interested in that issue around fees. It would happen in main street lending when a person moves mortgages, accounts and so on and so forth. In this scenario, I understand the people concerned would be members of both institutions at the same time. It is not completely similar. Will fees apply and how will they be regulated, if at all?
I am trying to think through a case where somebody goes to a credit union that cannot provide the service required and the customer is referred to another credit union for the service. The customer then becomes a member of that credit union for that service. Sometimes when you are with a credit union and are applying for something, you find that you have to do this and that. Would the definition in the Bill require somebody to go back and be re-referred for another add-on service? I am thinking of a case where the service an individual is looking for cannot be provided in credit union A. The individual is referred to credit union B but only for that service. What if, during the provision of that service, the individual needs something else? That is the issue.
Let us consider a scenario where credit union A does not provide mortgages and a customer has to be referred to credit union B to access a mortgage. The customer gets a mortgage and gets a green loan that is either added on to or ancillary to the mortgage. Is that the sort of scenario to which the Deputy is referring?
A scenario of that nature.
That would be a matter for the framework agreement between credit unions. It would be for them to work out and regulate to determine as between different corporate entities how it would work. It is not a matter for the legislation but a matter for that framework agreement.
As to fees, the Deputy has answered his own question. The customer would be a member of both credit unions, albeit for a defined set of services in the second credit union. While it is a matter for the framework agreement between credit unions, this legislation is enabling those credit unions to create those agreements. I do not foresee fees applying but it is a matter for the agreements between the credit unions.
The purpose of the credit union movement is to avoid unnecessary costs and fees. I imagine the framework would reflect our discussion here and the intention would be to minimise fees. The whole thrust of this Bill is to make it possible for members of a credit union that does not offer proper mortgages or SME lending to easily go down the road to the next one. There are issues around which neighbouring credit union customers are sent to. Naturally, all of that cannot be in the legislation. The thrust for anybody here is that we want legislation to make it easy and simple to move. I would assume the framework, which can be renewed after a period of time, would reflect that. I see no reason it would not. The credit union movement is fully behind all of these changes, from what I can understand. There is a positive vibe going on in the Department. The Minister of State and her team are effecting that through their engagements with the credit union movement and all the sectoral bodies. We naturally expect follow-on actions. Perhaps the answer to the Deputy's concerns is that there is a built-in review. I have no doubt the Minister of State will be watching this area regularly. We assume there will be no fees. Assuming everything stays the same, that is the thrust of it. There would be no harm in building in a review after six months or a year to see if this is working in the way we hope it will.
That is correct. We are trying not to go too far. Our purpose here is to provide, as the Deputy has said, the broadest enabling environment. There is considerable enthusiasm among the credit union movement to take this and run with it. Of necessity, it is for them to work out the operation of that although, in the normal course, it will be regulated by the Central Bank. The particular commercial arrangements credit unions create between themselves, the referral pathways and processes, are not a matter for legislation but a matter for the credit unions to create and develop and allow to flourish.
Yesterday, I met representatives of 13 credit unions in Mullingar. Those credit unions are of various sizes. There is great enthusiasm about how they may step into the next stage of the implementation of this legislation. The Deputy is correct. As we discussed on Second Stage, what happens if the opportunity created by the legislation is not taken? How do we, as members of the Oireachtas, assess and review the enabling environment we have created? We have built into the legislation an annual review by the credit union advisory committee, CUAC, of the implementation of the legislation. The report will be provided to the Minister and published. That will allow us, as legislators, to assess the impact of what we have created in this enabling legislation. It is a matter then for determining how well or otherwise we view implementation as going relative to the overall strategy of creating and enabling a strong community bank, which is part of the retail banking review strategy and our banking strategy for the future. We think this legislation enables that but we cannot set up frameworks or refer members for mortgages. It is for the credit union movement to step in and do that. I have heard from the credit union movement and I see representative groups are reflected here today. I have received letters from them in recent days. They are excited. Indeed, they are getting ahead of this work with the establishment of the credit union service organisations, CUSO. They are ready to take this and go with it. Of course, we want to ensure the opportunity is taken and that is why we have built in CUAC, which we think is an appropriate body, to conduct such a review to assess the strategy annually.
Could something like this enable the facilitation of a product that would support the families and homeowners who are impacted by pyrite and mica? At the moment, the shortfall in the grant for what is needed for rebuilding and all of that is falling very short. I hear from many families who are under pressure because they cannot get facility from the banks. Would what we are doing here enable credit unions to come together to offer that facility? Has the Minister of State had any discussions in the construction of this legislation around such a product or provision?
The legislation enables credit unions to come together in a whole range of different ways, whether in respect of the cultivate loan, which is already the case, or collective mortgage products. It is important for the legislation not to be prescriptive about the types of financial services that might be offered. I do not want to give an answer that suggests this legislation will be the solution to the problems the Deputy has outlined but the legislation enables credit unions to refer members more broadly, to create collective products and to share risk. It is up to them to determine what those financial products are or what needs in the market may or may not be met by individual credit unions or groups of them together.
I absolutely understand. My reading of it is that it would facilitate such a provision. We would very much encourage that to be done as quickly as possible.
I understand what the Minister of State has said about framework agreements between the credit unions and how this legislation will apply between credit unions. My issue is with the proposed new section 51A(2)(a), which states "the receiving credit union may provide the service in respect of which the referral is made to the member concerned". That is important because credit unions do not want to lose custom. They do not want customers to go and get student loans, car loans or holiday loans from another credit union just because a credit union cannot provide that one service. I understand the concept and importance of that. Perhaps there is no issue.
The Minister of State mentioned the importance of a review. We are familiar with the mortgage market. Many people who go to banks will now go to credit unions. They may be referred to a credit union for the provision of a service, that is, to get a mortgage to purchase a home. They will only be deemed a member of that credit union for that service, to get a mortgage, and will remain a member for as long as the mortgage exists. As we know, as years go on, people may tap into their mortgages. They may want a top-up, which is not a new mortgage but is a release of equity. That cannot be done with another institution because there is already a burden on the customer's property with the credit union. Such a top-up would be a separate service. Would that individual have to go back to the original credit union or be referred for a top-up?
It is clear that is for the service referred to. Maybe there is no way round that. I agree with the sentiments about making sure the local credit union's custom is not lost but people are also able to avail of the benefits of the credit union movement. I am giving an example like that and there may be many other examples.
This section could be very specific and I am not sure if a framework agreement can deal with that. Maybe it can deal with loans, any future top-ups and so on. We need to make sure it is as seamless as possible and that the legislation does not create an unnecessary burden where people have to go back to their original credit union and ask to be referred back for one wee bit, because the original referral was for a specific service, the service has now got a little wider, and now, due to the legislation, they need to go back again and get referred. The legislation is enabling legislation and we have not looked at what that process means for an individual. I am not even sure if that means an individual has to open a new account with another credit union or whether the initial documentation he or she has with the original credit union will suffice for the referred-to credit union or whether that individual has to go through the whole compliance procedure again. This is the Leas-Chathaoirleach's favourite issue, knowing your customer and all of that.
It is not clear and part of that is left for other sections. The issue is this section is so specific that it might cause an issue in its implementation where there is a variance of a service or when you start to deal with people, you find that what they need is not exactly what they needed and they have to go back and get another referral. That is my point on this and maybe the best way is to keep it under review and look at its implementation. I just wanted to flag that.
It would be worthwhile for us as a committee, when we get to the framework stage, to consider that there has been much positive engagement with the credit union representative bodies and sector and they could come in to discuss the detail and framework. I totally agree with Deputy Doherty that we do not want to have legislation in place that does not facilitate or catch all the scenarios, but we do not want to do the opposite either. I have seen legislation on what credit unions could invest in when it came to housing and housing bodies. It got very complicated over words and we did not get the full benefits we could have got. While we want to get it right, we do not want to tie it up the other way either. As well as a review, we should also engage with the representative bodies after this legislation passes to make sure all our concerns about the framework are dealt with too. We all want to see it working for the credit unions and, more importantly, we want members of credit unions to have the full opportunity to avail of all the services, whether that is the situation relating to mica or pyrite or moving away from a non-traditional bank lender with a mortgage, where people are being hit with extremely high rates. There has been much discussion here. We want to have opportunities here but not to lose either. That is my point and there is a bit of work for us too.
That is a strong idea because the framework agreements that follow this legislation are where the detail is properly worked out. As I said, at every stage, we have tried to create an enabling environment and not be too prescriptive. There is a question of how that is dealt with thereafter. I recommend perhaps including the CUAC in that conversation. It is an ongoing advisory body and will be conducting the review to make sure the practicality of this works. The intent, as Deputy English said, is to make it work in as frictionless and seamless a way as possible from the perspective of the member, the resident or the citizen who is accessing financial services. If people's local credit union does not offer a service, they can be referred easily to another to avail of that service. It is already the case that a member of a credit union can already go to, for example, cultivate. That structure is already in operation for slightly different forms of lending, so parallel structures are already in being. It is really a question for the framework agreements and how that is done. I strongly encourage that conversation to be held beyond this legislation.
Question put and agreed to.
Sections 24 and 25 agreed to.
SECTION 26
I move amendment No. 26:
In page 15, lines 19 to 21, to delete all words from and including “subsection” in line 19 down to and including line 21 and substitute the following:
“subsection (1)—
(a) by the substitution of “every 3 years, all plans and policies” for “annually, all plans, policies and procedures”, and
(b) by the insertion of the following subparagraph after subparagraph (xvi):
“(xvia) environmental, social and governance policy;”.”.
Amendment agreed to.
Question proposed: "That section 26, as amended, stand part of the Bill."
I welcome this section. It obviously changes the requirement on credit unions, where currently in legislation all plans, policies and procedures have to be reviewed by the board at least annually. It changes that to three years but drops the requirement for them to review procedures in their entirety. Maybe the Minister of State might speak on that. It only requires them to review policies and plans. What does that amendment do with regard to procedures?
The Central Bank does not have any requirement for a periodic review of its policies regarding credit unions. We see the impact some of the policies are having on credit unions. We hear it in our local communities. We hear, when some of the representatives come here, about lending limits that would apply during Covid, about deposit limits and all that. There has been a stipulation in legislation up to now that every board has to review its plans, policies and procedures every year. This legislation will change that to plans and policies every three years, but there is no requirement for the Central Bank to do it. I think that is a mistake. Has the Department considered introducing a similar requirement for the Central Bank so that it would review its credit union policies more regularly, for example, at least every three years? That would be welcome.
On the amendment, it is important to highlight that this is not a mandatory change. Boards may still choose to review policies or procedures more frequently. The broad thrust of this is that, by removing the requirement to review it annually, we are trying to allow boards to have more time to focus on matters such as strategic planning, which is probably a more efficient use of board time on a year-on-year basis. The main thrust of this and other amendments relating to governance is to deliver relief on some elements of the current legislation, such as the lessening of the minimum number of board meetings and board oversight committees. We discussed that on Second Stage and I know Deputy Doherty was in broad agreement with that.
It is important to highlight the point about the Central Bank analysis. First of all, a mandatory provision would be a matter for the Central Bank Act, as I know the Deputy is aware. However, it is important to say, as the Deputy will be aware, that the International Credit Union Regulators' Network, ICURN, review of the Central Bank processes relating to credit unions is going on. That process can be fed into. CUAC has highlighted a number of areas where it expected to see a review by now. That is an ongoing dialogue the Minister, Deputy McGrath, and I will have with the bank to make sure we have the best responsiveness to some changes that are happening in the credit union movement, including, importantly, in this legislation. A mandatory provision such as that would be a matter for the Central Bank Act, as I understand it.
It would be a matter for the Central Bank Act but it is a matter for us to insert it into the Central Bank Act and for the Central Bank to fall in line with the law of the land. We are setting out a legislative provision that credit unions have to review their policies and plans every three years. We do not need to do that since the Central Bank could just mandate them to do that, but we are deciding as legislators that, for the safety of people's moneys, these plans and policies should be reviewed every year and it is a legislative issue. We could do the same with the Central Bank.
I raise it because it is worthy of consideration. Returning to my earlier point, there has to be a common purpose between the movement and the Central Bank on how we develop it. Sometimes, as legislators, we pass legislation and find that it will be frustrated out there because the will have not materialised. Hopefully, that will not happen with this legislation. We, therefore, seek bit of certainty or review where the policy has to be reviewed every three years. It is not that I oppose it but I ask the Minister of State to put on the record the rationale for dropping the requirement in its entirety to review the procedures at credit union level, now that the legislation will only require plans and policies to be reviewed.
It is every three years. I think the Deputy said every year. We are reducing the burden on the boards. The view is that the review on an annual basis has been too onerous for boards, particularly for voluntary boards, and that the balance could be slightly off and that every three years, at a maximum, is acceptable. However, it is available to them to do them more regularly should they wish. That is the rationale.
I understand that completely. However, the question is that the Bill is changing the requirement from one year to three years for plans and policies but there is now no requirement to review procedures at all in legislation. I am asking the Minister of State to put on the record the Department's rationale for that.
It is aligned with the broad changes for the distinction between the board and the professional management. Procedures themselves are a question for day-to-day management and the CEO of the credit union and are not really a question for the board, which has more of a governance and strategic policy function. Our view was the area of procedures was too granular for the board in any case and that is properly dealt with by a professional CEO, their credit team, etc. and that the board’s work would be focused on more strategic issues, plans and policy, ESG and how that is working. This broad proposal was raised by CUAC at an earlier stage and it is on foot of its recommendation that we are doing this. It is aligned to other amendments where we are trying to separate out in some way the professional role of the CEO and the operational responsibility they have on a day-to-day basis and a more strategic function for the board in the future.
I agree with the dropping of the measure but I think it is important to put the rationale behind it on the record. I welcome that and thank the Minister of State.
I cannot comment from this position other than to say that from past experience, careful regard must be had for movements in the vulture funds into the mortgage area and the drift to ever-increasing mortgages and the extent to which that can virtually cripple the borrowers in the marketplace at any given time. For instance, we all spent 19% or 20% on interest rates in the past but there is a difference. Now, the investment is-----
Bernard, some of us have-----
We should all relax on that matter. However, it has an appalling effect as we can see on individual borrowers all over the country. Should there be competition between the vulture funds, investment funds or whatever we want to call them and the pillar banks and the credit unions, we could have a big problem on our hands and it could escalate very quickly. The interest rate is on a much bigger asset. It could be interest on €1 million borrowed. That would be unusual but in certain parts of the country, it might happen. On €0.5 million it is not so unusual and certainly on €200,000 or €300,000 it is not unusual and it mounts up very fast for the borrower who may find it blowing up in their face with huge demands that increase monthly. It does not go away. It is one of the things that we need to watch and particularly with the current attitude among the vulture funds that seem to have adopted a new policy that we may need to revisit at another sitting of the committee. I certainly would like to see that.
Question put and agreed to.
Section 27 agreed to.
SECTION 28
I move amendment No. 27:
In page 15, to delete lines 33 to 35 and substitute the following:
“union”,
(a) in paragraph (j) of subsection (4), by the insertion of “initial” after “following a
director’s”, and
(b) in subsection (7), by the substitution of “the nomination committee shall consider
the balance of gender, skills, experience and knowledge” for “the nomination
committee shall consider the balance of skills, experience and knowledge”.”.
Amendment agreed to.
Section 28, as amended, agreed.
SECTION 29
I move amendment No. 28:
In page 16, to delete lines 6 to 8 and substitute the following:
“(b) in subsection (4), by the substitution of “then, in the case of a credit union other than a corporate credit union, the secretary” for “then the board oversight committee”.”.
Amendment agreed to.
Section 29, as amended, agreed to.
SECTION 30
I move amendment No. 29:
In page 16, lines 10 to 13, to delete all words from and including “amended,” in line 10 down to
and including line 13 and substitute the following:
“amended—
(a) in subsection (1)—
(i) by the substitution of the following paragraph for paragraph (b):
“(b) which is—
(i) in the case of a credit union other than a corporate credit union, chaired by a member of the board oversight committee, and
(ii) in the case of a corporate credit union, chaired by a member of the board of directors,”,
and
(ii) by the substitution of “the board of directors shall, subject to subsection (4A), elect” for “the board of
directors shall elect”,
(b) in subsection (3), by the substitution of “the board of directors may, subject to subsection (4A), by secret ballot elect” for “the board of directors may by secret ballot elect”, and
(c) by the insertion of the following subsection after subsection (4):
“(4A) A manager appointed as a director pursuant to section 63A(6) shall not be eligible for election
under subsection (1) or (3) or authorisation under subsection (4).”.”.
Amendment agreed to.
Sections 30, as amended, agreed to.
Section 31 agreed to.
NEW SECTION
I move amendment No. 30:
In page 16, between lines 23 and 24, to insert the following:
“Amendment of section 65 of Principal Act (credit officer and credit control officer)
32. Section 65 of the Principal Act is amended by the deletion of subsection (2).”.
Amendment agreed to.
SECTION 32
I move amendment No. 31:
In page 16, line 34, after “committee” to insert “, in writing,”.
Amendment agreed to.
Section 32, as amended, agreed to.
SECTION 33
I move amendment No. 32:
In page 17, lines 5 to 7, to delete all words from and including “amended,” in line 5 down to and including line 7 and substitute the following:
“amended—
(a) by the substitution of the following subsection for subsection (1):
“(1) A credit union shall submit an annual compliance statement to the Bank certifying its compliance with the
requirements of this Part and the regulations, if any, made in respect of a matter to be prescribed under this Part by the Bank.”,
and
(b) by the insertion of the following subsection after subsection (1):
“(1A) The Bank may prescribe the form and content of the annual compliance statement referred to in subsection (1).”.”.
Amendment agreed to.
Section 33, as amended, agreed to.
SECTION 34
I move amendment No. 33:
In page 17, line 13, after “persons” to insert “standing”.
Amendment agreed to.
I move amendment No. 34:
In page 17, line 20, after “persons” to insert “standing”
Amendment agreed to.
I move amendment No. 35:
In page 17, to delete lines 26 and 27 and substitute the following:
“ “(4) The board of directors of a credit union may—
(a) designate a person for the purpose of paragraph (a) of subsection (3), and
(b) de-designate a person having been so designated.”.”.
Amendment agreed to.
Section 34, as amended, agreed to.
Section 35 agreed to.
NEW SECTION
I move amendment No. 36:
In page 17, after line 35, to insert the following:
“Amendment of section 72 of Principal Act (persons disqualified from acting)
36. Section 72 of the Principal Act is amended, in subsection (1), by the substitution of “who, in the previous 10 years,
has been convicted” for “who has been convicted”.”.
Amendment agreed to.
SECTION 36
I move amendment No. 37:
In page 18, lines 3 and 4, to delete “in paragraph (b) of subsection (2), by the substitution of
“the member’s own account” for “his own account”,” and substitute “by the deletion of
subsection (2),”.
Amendment agreed to.
Section 36, as amended, agreed to.
Sections 37 to 40, inclusive, agreed to.
NEW SECTION
I move amendment No. 38:
In page 18, between lines 28 and 29, to insert the following:
“Amendment of section 76N of Principal Act (election of board oversight committee)
41. Section 76N of the Principal Act is amended—
(a) in subsection (1)—
(i) in paragraph (a)—
(I) by the substitution of “from among the members, by secret ballot at the organisation meeting” for “by secret ballot at the organisation meeting”,
and
(II) by the substitution of “filled, from among the members, by secret ballot at an annual general meeting” for “filled by secret ballot at an annual general meeting”,
and
(ii) in paragraph (b)—
(I) by the substitution of “in any other case, from among the members,” for “in any other case,”,
(II) by the substitution of “filled, from among the members, by secret ballot at an annual general meeting” for “filled by secret ballot at an annual general meeting”,
and
(b) in subsection (4)(l), by the substitution of “parent, sibling or child” for “parent or
child”.”.
Amendment agreed to.
Section 41 agreed to.
SECTION 42
Amendments Nos. 39 to 45, inclusive, 48 and 51 are related and will be discussed together.
I move amendment No. 39:
In page 19, to delete lines 10 to 13 and substitute the following:
“ “(b) shall, within the relevant period, be delivered to each member of
the credit union.”.”.
The grouping addresses the following issues: organisational matters regarding the delivery of notices of meetings, documents, annual accounts and the calling of meetings, quorum for a general meeting of a corporate credit union, removal of references to he, his, him, etc., changes to the processes for small payments on death and the insertion of the sixth schedule which is the matter to be provided for in the rules of a corporate credit union.
These amendments are welcome. Obviously there are issues in terms of gender and some other constitutional technical amendments. I have no issue if the Minister of State wants to go to the section.
Amendment agreed to.
Section 42, as amended, agreed to.
SECTION 43
I move amendment No. 40:
In page 19, line 16, to delete “personally, by post or by electronic means,”.
Amendment agreed to.
I move amendment No. 41:
In page 19, lines 17 to 19, to delete all words from and including “meeting,” in line 17 down to and including “notice”, where it firstly occurs, in line 19 and substitute “meeting”.
Amendment agreed to.
Section 43, as amended, agreed to.
NEW SECTION
I move amendment No. 42:
In page 19, to delete lines 22 to 38, to delete page 20, and in page 21, to delete lines 1 and 2 and
substitute the following:
“44. Section 80 of the Principal Act is amended in subsection (2)—
(a) by the substitution of the following paragraph for paragraph (d):
“(d) shall, within the relevant period, be delivered—
(i) personally, by post or by electronic means, to the auditor to such address as has been notified in writing to the credit union by the auditor for the purpose of receiving the notice, and
(ii) to each member of the credit union, and”,
and
(b) in subparagraph (iii) of paragraph (e), by the substitution of “confirm the attendee’s intention” for “confirm his or her intention”.”.
Amendment agreed to.
SECTION 44
Question proposed: "That section 44 stand part of the Bill".
This makes complete sense in terms of an administrative and climate change burden. We get packs annually from our local credit union with all the details and a lot of paper and, in many cases, I would imagine this goes into the recycling bin. Some people might scrutinise them, but in today's age, it makes sense that it may not need to be posted out and can be published on a website or elsewhere.
Regarding the provision in this section that allows for the consent of members to be sought and given to move from a paper-based form of communication to an electronic one, it does not stipulate how that consent must be provided. Should it not be very clear that this consent should be provided in the same manner as the credit union provided the information heretofore, that is, a credit union cannot move from a paper-based model to an electronic one where it is published on the website for everybody to find by emailing its members or publishing it on the website. If it is sending out the communication by paper, it should look for the consent to move away from that process using the same method. It is a point that has been raised with me. I can imagine that many people would be happy to get less paper and possibly get the email or see it published on the website but I just wish to make that point.
It is a logical point. We have not been prescriptive about that in the legislation but obviously that is a matter for the credit union. There is certainly a very strong logic to what the Deputy has said. I am not sure if it is necessary for us to put that in legislation but our provision is broad enough to enable that.
The legislation does contain other provisions that stipulate it must be in writing. Again, it is valuable information members have. Not a lot of members will look at it but some members cherish that information and knowing what the shares and profits are. I have made my point so I will leave it at that. I think it is worth considering whether we should state a credit union should seek that consent in the manner in which it is used to communicating with its members heretofore.
To clarify, the member can refuse, so if the member chooses to continue getting information in the same way he or she has preferred and enjoyed in the past, it is available to him or her. It is not a de facto shift or switch-off. The member will still be able to do that if he or she wishes. As I understood it, the Deputy is saying, we must prescribe the manner in which the member responds or gives consent.
What happens if no consent is provided?
Then the member is entitled to continue to get the information the way he or she has received it in the past.
Including annual accounts?
All of it, yes.
If no consent is given, that is, somebody does not respond, and many people would probably be happy with electronic communication, or they think "I'll do that next week", they will have to get it the same way as in the past.
The member will have to respond to give consent. He or she must positively give consent. It can be imagined in practical terms that this might be done the next time the member comes to the office and signs it. We are trying to find the most practical solution so it might be emails or someone provides a response proactively in the post or comes in and signs it the next time he or she has a transaction. We are making a big shift with a lot of members so it is for the credit union to work out practical ways of trying to achieve that, but what is important is that the member has discretion to continue to receive information in any form that is available. Our aim is to reduce the overall burden environmentally and in terms of procedures.
I might be taking it up wrong. In every organisation, many members will not engage with it until they need to. They know the credit union is there when they need it but they might disappear for two or three years and probably would not be in the habit of popping in and responding. We allow for change here but I presume the member will have to look for it in the traditional way. I could be wrong but I assume many members do not engage weekly, monthly or yearly.
We are enabling that it can be a response in writing, be that in hard copy written form or an email response. We are providing for the broadest enabling measure. It will always be available for a member of the credit union to request at any time in the future that it be in writing. A member can respond in an email or hard copy and may at any time withdraw previously given consent.
That is how I read it.
That is different. Basically the member who is getting the communication by paper may not get the communication by paper in the future but it would be up to the member to actively look for it again.
The member would first have had to give consent to stop getting it in paper. The member may then withdraw that consent and return to getting it back in paper at any time in the future.
So for notice of AGMs, extraordinary AGMs or annual accounts, a credit union will have to provide that on paper to members forever and a day unless they consent not to receive it on paper. Is that what the legislation will say?
If there are any issues to clarify, we can do it on Report Stage. It would be better if it were the other way round.
It involves the changes in section 188A(1)(c) as inserted by section 56, which it is proposed to be inserted by amendment No. 48,,"by electronic means to such address as has been notified in writing", so the provision is there. Does the Deputy want me to come back and reply-----
Could the Minister of State-----
-----and go through steps one, two, three and four before Report Stage?
It would be helpful before Report Stage.
Question put and agreed to.
NEW SECTION
I move amendment No. 43:
In page 21, between lines 2 and 3, to insert the following:
“Amendment of section 81 of Principal Act (general meetings: adjournment, quorum and
minutes)
45. Section 81 of the Principal Act is amended—
(a) in subsection (4), by the substitution of “Subject to subsections (5) and (5A)” for
“Subject to subsection (5)”, and
(b) by the insertion of the following subsection after subsection (5):
“(5A) The quorum for a general meeting of a corporate credit union shall be
2 members.”.”.
Amendment agreed to.
SECTION 45
I move amendment No. 44:
In page 21, lines 5 and 6, to delete all words from and including “amended,” in line 5 down to
and including line 6 and substitute the following:
“amended—
(a) in subsection (2), by the substitution of “irrespective of the member’s
shareholding” for “irrespective of his shareholding”, and
(b) in subsection (5), by the substitution of the following paragraph for paragraph
(b):
“(b) of making ineffective a demand for a poll on any such question
which is made by—
(i) in the case of a credit union other than a corporate credit union,
not less than ten members, and
(ii) in the case of a corporate credit union, at least one member,
having the right to vote at the meeting (or, as the case may be, the
adjourned meeting).”.”.
Amendment agreed to.
Section 45, as amended, agreed to.
Sections 46 to 48, inclusive, agreed to.
NEW SECTION
I move amendment No. 45:
In page 21, between lines 29 and 30, to insert the following:
“Amendment of section 92 of Principal Act (investigations and calling of meetings)
49. Section 92 of the Principal Act is amended, in subsection (1), by the substitution of the
following paragraph for paragraph (a):
“(a) an application is made to the Bank by—
(i) in the case of a credit union other than a corporate credit union,
not less than 30 members, and
(ii) in the case of a corporate credit union, not less than 2 members,
each of whom has been a member of the credit union throughout
the period of 12 months ending on the date of the application, or”.”.
Amendment agreed to.
Sections 49 to 52, inclusive, agreed to.
NEW SECTION
I move amendment No. 46:
In page 22, between lines 17 and 18, to insert the following:
“Amendment of section 129 of Principal Act (transfer of engagements between credit
unions)
53. Section 129 of the Principal Act is amended by the substitution of the following
subsection for subsection (1):
“(1) Subject to compliance with section 130—
(a) a credit union, other than a corporate credit union, may transfer its
engagements to another credit union which, in accordance with this
section, undertakes to fulfil the engagements, and
(b) a corporate credit union may transfer its engagements to another
corporate credit union which, in accordance with this section,
undertakes to fulfil the engagements.”.”.
Amendment agreed to.
Sections 53 and 54 agreed to.
SECTION 55
I move amendment No. 47:
In page 23, lines 3 and 4, to delete all words from and including “amended,” in line 3 down to
and including line 4 and substitute the following:
“amended by the substitution of the following subsection for subsection (6):
“(6) For the purposes of this section and sections 162 and 163, the interest
of a member of a credit union in the credit union is impaired if—
(a) the member is deprived of all or any part of the rights accruing to
the member by virtue of the member’s shareholding in, or
membership of, the credit union, or
(b) the member is deprived of the whole or part of the member’s
shareholding in the credit union.”.”.
Amendment agreed to.
Section 55, as amended, agreed to.
NEW SECTION
I move amendment No. 48:
In page 23, between lines 4 and 5, to insert the following:
“Delivery of notices etc.
56. The Principal Act is amended by the insertion of the following section after section 188:
“188A. (1) Subject to subsection (3), where a notice, direction or other
document is authorised or required by or under this Act to be sent or
delivered to a member of a credit union by the credit union, the credit
union shall, unless otherwise specified in this Act, do so in one the
following ways:
(a) by delivery to the member;
(b) by post to the address of the member as recorded in the books of
the credit union or such other address as has been notified in
writing to the credit union by that member for the purpose of
receiving the notice, direction or other document by post;
(c) by electronic means to such address as has been notified in writing
to the credit union by that member for the purpose of receiving the
notice, direction or other document electronically.
(2) Subject to subsection (3), a copy of a document, other than a notice,
required to be sent or delivered shall be treated as having been sent or
delivered, as the case may be, by a credit union to a member where—
(a) the credit union and the member have agreed to the member having
access to the document on a website maintained by or on behalf of
the credit union,
(b) the member is notified, in a manner for the time being agreed for
the purpose of such notification between the member and the credit
union, of—
(i) the publication of the document on the website referred to in
paragraph (a),
(ii) the address of that website,
(iii) the place on that website where the document may be accessed,
and
(iv) how the document may be accessed,
(c) in the case of annual accounts—
(i) the credit union’s rules allow for distribution of or access to the
annual accounts by electronic means,
(ii) the credit union has requested, in writing, the member’s consent
to the use of electronic means for conveying the credit union’s
annual accounts and the member has not objected to such use
within 10 days of the receipt by the member of the request, and
(iii) the member may request at any time in the future that the annual
accounts be conveyed to the member in writing,
(d) where the document is required to be delivered within a relevant
period (as specified for the purpose of the provision requiring such
delivery)—
(i) the document is published on the website referred to in
paragraph (a) in the period from the start of the relevant period
to the conclusion of the meeting concerned, and
(ii) the notification given for the purposes of paragraph (b) is given
during the relevant period.
(3) This section shall not apply to the service, by or under this Act, of a
notice, direction or other document.”.”.
Amendment agreed to.
SECTION 56
I move amendment No. 49:
In page 23, to delete lines 11 to 21 and substitute the following:
“(c) section 53(10)(a) and (c);
(d) section 65;
(e) section 66;
(f) section 67;
(g) section 68;
(h) Part IVA;
(i) section 81(5);
(j) section 97(1)(a)(i);
(k) section 128;
(l) Part VIII.”.”.
Amendment agreed to.
Section 56, as amended, agreed to.
NEW SECTIONS
I move amendment No. 50:
In page 23, after line 21, to insert the following:
“Amendment of First Schedule to Principal Act
57. The First Schedule to the Principal Act is amended—
(a) by the insertion of the following paragraph after paragraph 6:
“6A. The procedure in accordance with which a person may be designated
or de-designated under section 67(4) and the circumstances in which a
person may be so designated or de-designated.”,
and
(b) by the substitution of the following paragraph for paragraph 12:
“12. Provision for dealing with disputes between the credit union and any
of its members, or any person claiming by or through any member or
under the rules.”.”.
Amendment agreed to.
I move amendment No. 51:
In page 23, after line 21, to insert the following:
“Insertion of Sixth Schedule to Principal Act
58. The Principal Act is amended by the insertion of the following Schedule after the Fifth
Schedule:
“SIXTH SCHEDULE
Section 13
MATTERS TO BE PROVIDED FOR IN RULES OF CORPORATE CREDIT UNION
1. The name of the credit union, which shall comply with section 10.
2. The place which is to be the registered office of the credit union to
which all communications and notices to the credit union may be
addressed.
3. The qualifications required for, and the terms of, admission to
membership of the credit union.
4. The mode of holding meetings and the method of notice, including
provision as to the quorum necessary for the transaction of any
description of business, and the mode of making, altering or rescinding
rules.
5. The appointment and removal of the board of directors and any
principal Committee and of other officers and their respective powers
and remuneration.
6. The procedure in accordance with which a person may be designated
or de-designated under section 67(4) and the circumstances in which a
person may be so designated or de-designated.
7. Determination of the maximum amount of the interest in the shares of
the credit union which may be held by any member.
8. Provision for the mode of withdrawal of shares and payment of the
balance due on shares on withdrawing from the credit union.
9. The mode and circumstances in which loans to members and, where
relevant, their members and loans to members of other credit unions
on a referral basis, are to be made and repaid.
10. Provision for the custody and use of the credit union’s seal.
11. Provision for the audit of accounts by one or more auditors appointed
by the credit union.
12. Whether disputes between the credit union and any of its members,
and, where relevant, their members, or any person claiming by or
through any member or member of the credit union’s member or under
the rules, shall be settled by reference to the Circuit Court or
arbitration.
13. Provision for the withdrawal of members from the credit union and for
the claims of the members of the credit union in liquidation.
14. Provision for dealing with directors who are more than 90 consecutive
days in arrears under a debt obligation to the credit union up to and
including the suspension or removal from the board of such
directors.”.”.
Amendment agreed to.
Amendment Nos. 52 and 53 are in the name of Deputy Joan Collins, however she is not present and so the amendments fall.
Amendments Nos. 52 and 53 not moved.
I mentioned earlier but to reiterate that on Report Stage we will be coming back on Section 36 on the revised processes for the approval of loans, and Section 67 on the revised processes for the review and approval of membership applications. Just to flag that.
Title agreed to.
Bill reported with amendments.
I thank the Minister of State and her officials for their attendance and assistance to the select committee with our consideration of the Bill.
I thank the officials for their work on this. I also want to thank the credit union movement, the Credit Union Development Association, CUDA, Credit Union Managers Association, CUMA, Irish League of Credit Unions, ILCU, the National Supervisors Forum, NSF, and the Central Bank, which have done huge work in a very collaborative way. I appreciate this is complicated legislation. We are amending amendments. Such amendments are not always the best way of amending legislation but it is complicated work. Huge work has gone in by a whole range of other people, including my predecessor, the Minister of State, Deputy Sean Fleming. I look forward to coming back on Report Stage and debating this Bill further.
I thank the officials from the Department for all the work they have put into this. When we saw the list of amendments we said, "Oh God". In some cases, whole pages were deleted and there were multiple amendments. When we are amending legislation that is amending original legislation, it is a challenge. It shows the work that has continued since the publication of the original Bill and there is no doubt that the version we have before us is much improved and may even be improved further before Report Stage.
I also thank the credit union movement which has engaged with my office on this Bill. Does the Minister of State have an indication as to when we are likely to see this Bill on Report Stage? Will it be soon? Will it be before the end of the year?
I hope as soon as may be. We have the two amendments in drafting and they do have priority. I might revert to the Deputies privately as soon as I get notice of that because I would be very keen to get this done and come back on Report Stage as quickly as may be. We offered a briefing to Deputies in advance of Committee Stage. We will do the same again to facilitate the committee in any way. If any other questions arise between now and Report Stage, we would be only too happy to provide any information we can.
For the record, we are eager to get this legislation across the line, so it will not take much time in terms of Report Stage as soon as the amendments are drafted, if that is of benefit to scheduling purposes.
We will tell the Whips.
I echo Deputy Doherty's comments about the engagement around this. I can see that best practice was set here around positive engagement with the sector, which made our job of working through amendments and getting them dealt with easier. I thank the Minister of State, her officials and her team for that engagement over the past year. I also thank them for the tone that has been set. It is great to see the Central Bank is playing a role in that also because we all have one agenda here, which is that the credit union movement can be enhanced and work better in the service of its members. We know there are members who want to avail of credit union services and that must be our goal here. The engagement here has been very useful and worthwhile, so I thank everybody for that and I appreciate it.
I again thank the Minister of State and her officials, members of the select committee and members of the public and credit unions for their attendance and their patience in dealing with a matter of very serious importance today. I thank our own officials as well.