Irish League of Credit Unions (ILCU) president Ann O'Byrne yesterday hit out at the Registrar of Credit Unions which, she said, was placing an excessive compliance burden on ILCU members.

However, she welcomed the progress of legislative change that will permit credit unions to lend more money to members.

Ms O'Bryne was addressing a consultative general meeting of the league, attended by 1,400 delegates, which was also addressed by Finance Minister Brian Cowen and attended by John Hume, a former president of the league.

Ms O'Byrne welcomed forthcoming legislative changes designed to allow credit unions to lend to members on a longer-term basis. But she criticised restrictions being sought on how credit unions can invest surplus funds

"The necessity for the changes being sought by the Registrar of Credit Unions is baffling since the Registrar of Credit Unions in the Republic of Ireland already has sufficient powers to deal with non-compliance without introducing unnecessary restrictions."

An ILCU policy paper Social Finance and the Irish Credit Union Movement argues that the movement needs to be able to invest a greater multiple of its capital over long periods of time if is to engage in social investment.

Social investments cited in the paper include an €800,000 holiday hostel in Kilrush, Co Clare, a €100,000 investment in a crèche, and a €50,000 scheme in Charleville, Co Cork, to reduce dependence on moneylenders.

"Lending €0.5 billion in social finance, credit unions are by far the largest providers of this type of finance in Ireland," Ms O'Byrne said.

Mr Cowen praised the contribution of the credit union movement in Ireland, and said he would prioritise the implementation of the social finance initiative, which aims to increase the availability of loan finance for social projects through contributions from commercial banks.

"I intend to bring proposals to Government in the near future for the establishment of a social investment fund. A key priority is the early implementation of the initiative," he said.

Mr Cowen said "legacy issues" would not contribute to a constructive debate on the future of the credit union movement, but he remained open-minded on how the regulatory regime affecting it would evolve. "I have no preconceptions or fixed views regarding the shape of the model for your future development. All proposals for changes in the legislative framework will be assessed on their merits."