Minister bows to demands of credit union lobbyists in new bill
THE largest lobby group for credit unions has secured the majority of changes it demanded to new legislation.
The victory for the Irish League of Credit Unions (ILCU) means that the new legislation to bring in tougher regulations for the sector will now be watered down.
So ferocious was the lobbying campaign that former senator Joe O'Toole had accused it of having "learned nothing and forgotten nothing" about financial governance and probity.
Now it has emerged that Finance Minister Michael Noonan has yielded to pressure from the lobby group.
Early drafts of the Credit Union Bill 2012 would have put major restrictions on the length of time people could serve on a credit union board. That has now been amended in the legislation that was passed this week. A ban on those related to someone who does voluntary work for a credit union becoming a credit union director has also been removed.
Meanwhile, the European Commission has approved government plans to encourage mass mergers among credit unions. The move is likely to see as many as 250 credit unions merge in the next three years.
The State's 400-plus credit unions are operated and run separately. But a government-appointed commission that reported in April recommended that credit unions should come together to benefit from economies of scale and to weather the financial storm.
The Government has put aside €250m and the same again next year to bail out troubled credit unions. Now the EU Commission said it had looked at the State's plans to bail out distressed credit unions and found it was in line with EU state-aid rules.