Credit unions bid to ‘dilute’ overhaul

A Government minister has accused the umbrella body for credit unions of trying to dilute a bill which would improve governance of the troubled sector.

Junior minister Seán Sherlock said the Irish League of Credit Unions was waging a “completely disingenuous” campaign against the Credit Unions Bill.

It comes as the Government prepares to pump an initial €500m of taxpayers’ money into the sector to plug a budget hole — a bailout that could ultimately reach €1bn.

The bill seeks to provide for the restructuring of credit unions and put in place new regulatory and governance frameworks.

But the ILCU is opposing a number of elements in the bill, and is lobbying TDs and senators on the issue.

It says a proposal to impose term limits on credit union directors is “anti-democratic” and an “attack” on the volunteers who “form the bedrock” of the movement.

The ILCU also says the application of Central Bank legislation to credit unions is “unfair” as credit unions have always been treated as separate to banks.

The body also does not support the proposal to regulate credit unions based on their asset size and instead favours a tiered system based on risk and complexity.

In a letter to TDs and senators, ILCU chief executive Kieron Brennan urged TDs and senators to “raise and support our requests and concerns with Government”.

But Mr Brennan’s letter prompted a furious response from Joe O’Toole, a member of the Government-established commission on credit unions, on whose recommendations the legislation is based.

Mr O’Toole, a former senator, has written his own letter to TDs and senators accusing the ILCU of trying to “undermine” the legislation.

He said the ILCU had been represented on the Commission on Credit Unions, and that the commission’s report had been agreed unanimously.

But it now appeared “that some internal ILCU matters are taking precedence over a Government commitment to make the guts of a billion euro available to solve the credit union difficulties, through a programme of stabilisation and through the introduction of new standards of governance”.

The bill would “create a viable and safe Irish credit union movement”, Mr O’Toole said, and he urged TDs and senators to support it “without diluting” it.

Mr Sherlock said: “The executive of the ILCU are being completely disingenuous in waging this campaign.

“They were members of the commission and they signed off on the report. They are now seeking to deconstruct that report.”