FINANCIAL SERVICES DEPOSIT GUARANTEE SCHEME BILL

Posted on 18/06/09 by Michael P Kitt I very much welcome what the Minister has done in this Bill and I am aware that it is part of a package of legislative measures to amend and update the Irish deposit guarantee scheme. While I welcome the increase in the deposit guarantee scheme for banks and building societies from €20,000 to €100,000 for eligible depositors and institutions, with effect from 20 September 2008, I also welcome the scheme as it applies to credit union savers. These measures are very important. While previous legislation applied to the seven covered credit institutions, the deposit guarantee scheme applies to all authorised credit institutions in the State, including credit unions which have not benefited heretofore from statutory deposit protection.
In many of my comments I will refer to the credit union movement. In fact, people involved in the credit union movement to whom I spoke did not raise the issues about which other Deputies have talked.
One of their concerns was on making representations to the Financial Regulator to relax the requirements of section 35 of the Credit Union Act. Their query was on the loan book and particularly the question of the 20% limit on loans greater than five years. Many credit unions are making representations to the Minister and Financial Regulator on that issue and I hope we will get some progress on it. The credit union movement members say they have options of restructuring the debt, which would put them in breach of section 35, or accepting the reduced borrowing, which will allow arrears to escalate. It is important we see a change in that situation whether by legislation or guidelines from the Financial Regulator.
One of the difficulties we have in many parts of the country, particularly in rural Ireland, is that for many years even when the economy was in very good shape, financial institutions were closing down throughout the country. Some branches in Dublin and other cities and large towns closed, but most of the closures were in rural areas. Very little publicity has been given to these closures. Local banking services are very customer friendly and have the market intelligence one needs.