Credit unions must tell on tax cheats

CREDIT UNIONS and banks are to be forced to blow the whistle on customers they suspect of cheating on their taxes.

Any financial institution which fails to comply with the obligation will face penalties under legislation which is part of a wider drive to regulate financial services.

Banks or credit unions may face penalties if they do not automatically pass on sensitive information to the gardaí or Revenue Commissioners.

The Government says it is part of a drive to combat money-laundering.

However, Opposition parties say the new measure will place credit unions under a crippling administrative burden.

The move is expected to be announced today, when the Government places an amendment to the Financial Services Authority Bill, which is before the Dáil.

This legislation will also provide for a single financial regulator to be known as Irish Financial Services Regulatory Authority (IFSRA) to be established.

The Irish League of Credit Unions (ILCU) yesterday expressed concern that the measures, together with a range of new obligations, will place them under major pressure.

ILCU chief executive Liam O'Dwyer said he was not opposed to regulation, but said some credit unions abroad had been forced to close on foot of strict regulation laws.

"We certainly have concerns with some of the amendments brought forward," Mr O'Dwyer said. "But we hope other amendments will reflect the unique, and not-for-profit ethos of credit unions."

Labour finance spokeswoman Joan Burton said she had concerns that there had been little thought of the pressure the obligations would place on credit unions.

The Department of Finance declined to comment on amendments to the bill, but Finance Minister Charlie McCreevy said regulation can only improve the finance industry.