McCreevy back in battle with credit unions
The Irish League of Credit Unions (ILCU), which represents 2.6 million small savers in 535 branches nationwide and savings worth some €6bn, has denounced efforts to change the way they are to be regulated. A weekend meeting of delegates in Galway agreed to urge all their members to lobby their local TDs to prevent the planned changes.
ILCU president John O'Regan said the new regime meant they will be treated much the same way as banks effectively ignoring that they are a voluntary, non-profit movement.
The new dispute harks back to a bitter two-year row between the credit unions and the Finance Minister over the method of applying DIRT tax on savings which began in 1998.
During all that time Mr McCreevy refused to meet the movement's leadership because he believed they had betrayed him. It took the Taoiseach's and Tánaiste's personal intervention to resolve the impasse in the spring of 2000.
The Finance Department last night rejected the arguments advanced by the credit unions. A spokesman said there were changes in the way credit unions were to be regulated but there was utterly no question of treating them like banks.
"Our view is that their concerns are unfounded. Nobody is trying to undermine their voluntary ethos and its non-profit motives. But we have obligations to properly regulate a movement which has grown by such large proportions to a multi-billion euro business," the finance spokesman said.
The row centres on the application of controls by the new Irish Financial Services Regulatory Authority (IFSRA ) to the credit union movement. The new umbrella body will regulate all financial services such as banks and insurance companies.
It is understood the IFSRA board were concerned a new Regulator of Credit Unions was not under sufficient supervision and Mr McCreevy has changed the rules to ensure that is addressed. But officials insist this does not equate to applying bank rules to credit unions, any more than the regulatory regime means applying bank rules to insurance firms.
The credit unions say they had consulted with government over the regulatory regime and were originally satisfied. But they say the changes mean the Regulator's office will now lose its autonomy.
"We're very concerned because banks and credit unions are totally different and they cannot be regulated the same way. Any attempt to do this could damage our ethos ILCU president John O'Regan said.
