Contribution to the Dail Debate on the Credit Union Bill 2012

November 19th, 2012 - Pat Breen


Deputy Pat Breen: I welcome the opportunity to contribute to this debate. I wish to acknowledge the work of the Minister for Finance, Deputy Michael Noonan. I compliment him on the priority he has given to securing the future of the credit union sector. I note that John Hume served as Ireland’s youngest ever president of the Irish League of Credit Unions, from 1964 to 1968. He stated that “[of] all the things I’ve been doing, it’s the thing I’m proudest of, because no movement has done more good for the people of Ireland, north and south, than the credit union.” I concur with his comments.

The credit union movement is the bedrock upon which our communities have been built and have survived in every corner of Ireland. With 399 registered credit unions in Ireland serving 3 million members, the credit union movement is substantial. Credit unions could be best described as our grass-roots banks because they are the champions of ordinary people in our communities throughout the length and breadth of the country. They have retained their popularity because they are owned and run by their members who know and understand the needs of their members and customers. There is also a strong culture of credit unionism throughout Europe and in the United States. Given the difficult financial situation which has arisen in the banks since 2008, the regulation of credit unions will allow the credit union movement to expand and grow its membership. International experience supports this view. When regulation was introduced during President Reagan’s presidency in the US in 1992, the membership of credit unions swelled and today, there are in the region of 89 million credit union members in the US. In my view, the reason credit unions have retained their popularity is because they have a strong customer-friendly ethos and a strong culture of volunteerism. Unlike the banks, credit unions treat their customers as persons rather than as numbers. The retention of these attributes presents real opportunities for credit unions to grow particularly during this financial crisis.

I recently read an article in a financial magazine which cited the experience in the United States over the past month. Credit unions experienced a surge in membership when one of the bigger banks indicated that it intended to introduce a $5 increase in its fees for debit cards. I believe that the same opportunities exist here for credit unions. This is why they must be supported and given every opportunity to develop their business.

Like many Members of this House, I have been contacted by credit union members. The credit union movement is very strong in my constituency of Clare. It plays an integral part in the lives of people in west Clare, Kilrush, in my own parish of Lissycasey, Ennis, Clarecastle, Shannon and Sixmilebridge. I welcome the Minister’s commitment to engage in this debate and consider any good ideas which may be put forward. I understand from the Minister’s comments that the exclusions from board membership and the situation regarding treasurers were recommended in the report on the Commission on Credit Unions and agreed with the credit union stakeholders.

The credit union movement depends on its volunteers but there is concern that the restrictions and limitations on board membership, coupled with the additional responsibilities and the extra committees which are being introduced, will undermine the movement by overstretching the demands of their volunteers, upon which it depends. We must ensure that volunteers continue to play a very active role in credit unions, that involvement is encouraged and that no obstacles are placed in the way of volunteers continuing to support their local credit union.

Many credit unions wish to expand the provision of facilities to customers. They would like to be in a position to offer electronic payment accounts. This has not been addressed in the Bill. However, I understand it is not necessary to include a clause in this Bill to facilitate electronic fund transfer, EFT, as only 10% of credit unions affiliated to the Irish League of Credit Unions currently have the ability to provide this service. I am aware that the Irish League of Credit Unions is working with its members to develop this service. It is anticipated that EFT services will be available by the end of December. It is certainly timely given that the issuing of cheques looks likely to be a thing of the past as early as 2016.

I am a strong advocate of the credit union movement. I welcome the commitment and ability to secure the viability of credit unions, which is what the Bill is all about. However, I am anxious that volunteerism, which underpins the success of the entire movement, be supported. This has been reflected in the speeches of all speakers on both sides of the House. I look forward to hearing the Minister’s summation at the end of the debate.