THE row between Minister of State Pat Rabbitte and the Irish League of Credit Unions seems far from resolved. While the Minister has this week gone some way towards meeting the league's needs, its general secretary, Mr Tony Smyth, says he is still not listening to the movement.

Details of a letter sent by the Minister to individual credit unions emerged, in which he suggested that they were supporting an "organised filibuster" to obstruct the progress of the Bill through the Dail.

Apart from the accusations - subsequently strongly denied by the league - his tactics have angered its 1.8 million members. Some believe he may be trying to isolate the Opposition from the movement in a bid to push the legislation through.

Upset at the seemingly endless list of speakers in the Dail from both the Opposition and Government parties on the forthcoming Bill, Mr Rabbitte recently bypassed the league to appeals directly to the credit unions to support his parliamentary efforts.

The league, which has entered protracted negotiations with the Department of Enterprise and Employment on its members' behalf, was, needless to say, less than impressed by this turn of events.

Mr Smyth says he is growing weary of the political wranglings. Mr Rabbitte's calls for them to "call off Fianna Fail" are outrageous, he says. "The workings of the various political parties is none of our business."

Run by 1,300 volunteers, the movement simply hasn't the time to be orchestrating campaigns and is only interested in ensuring that the new legislation will work, he says.

Put simply, Mr Smyth says the Bill, even after recent amendments, fails to recognise the philosophy and ethos of the movement which has successfully served communities in Ireland for more than 40 years.

"In its current form, the Bill would prevent us from meeting the needs of local communities," he claims.

The biggest problem, it seems, is the Minister's proposal to impose a limit on the amount of loans, shares and deposits that can be held by credit union members.

For years, credit unions have provided loans to regular savers based on a multiple of the amount of money on deposit. Usually members can borrow up to three times their savings. But the Minister is seeking to cap the size of these loans, effectively restricting the scope of its day-to-day lending activities.

The entire credit union movement, according to Mr Smyth, is justifiably worried about this aspect of the Bill and its consequences, particularly for local communities.

"The cap would immediately put the operation of credit unions into question. We need to be in a position to say to members that the credit union is a good and viable means of meeting their financial needs."

"Who will be saving with the credit union if they can't get a sufficient loan for an extension? Or for a new kitchen and a car in the same year? It's totally ridiculous."

While the bulk of loans provided by credit unions are relatively small, averaging around £2,800 for periods of up to 18 months, Mr Smyth says it is unacceptable that the Government should interfere in this way.

This week the Minister announced that he was now prepared to raise the proposed limits and give credit unions greater flexibility to meet the needs of its members. The amendments now raise the general limit on loans from £20,000 to £30,000, while allowing larger credit unions to advance bigger loans to members.

The league is still opposed to the imposition of a statutory limit, arguing that it would be more prudent for each credit union to set its own lending policy.

Efforts to introduce a more stringent regulatory regime are also being resisted by the movement, on the basis that they are "too intrusive" band again go against the basic ethos of the credit union movement.

"Some people are saying that we are opposed to regulation but, in fact, credit unions are the most regulated financial institution in this State."

A strongly regulated environment goes right to the heart of the philosophy of the movement, he says. "We have always operated on the basis that if you take in your neighbour's money you must make sure it is protected and that everything is above board."

All board members are elected on an annual basis while an elected body of supervisors acts as an internal regulator for individual credit unions. Outside of this, independent auditors examine the books, while the league overviews all accounts and procedures every 18 months, a. process soon to become an annual review. Detailed codes of conduct are also laid down by the Registrar of Friendly Societies and are rigidly adhered to by volunteers, according to Mr Smyth.

Each credit union is also bonded up to the value of around £600,000 while its savings protection scheme is underwritten by a central fund. These regulations were adopted on a voluntary basis by the movement.

Mr Smyth insists the drafting of the Credit Union Bill has caused "enormous difficulties" for members.

"The key worry is it fails to recognise the autonomy of the credit unions. If we lose that autonomy, the ownership of the credit union will be shifted away from local communities."

Many of the provisions suggested in the Bill, are worded in an "inappropriate" way for a movement operated on a voluntary basis, Mr Smyth says. If adopted, he believes it could affect people's willingness to become involved in local credit unions because of its increasingly onerous demands.

"Basically the strength of what we have is that The Rosses credit union, say, in Co Donegal is owned and run by the people of that community. We want to ensure that it stays that way." HE Bill also aims to substantially expand the range of services provided by local credit unions, allowing them to provide cheque books and debit cards to members and to link up with the cash machine services operated by the main banks and building societies.

This is a welcome move as far as the credit unions are concerned and offers great potential to provide a comprehensive range of financial services for members at a relatively low cost.

Mr Smyth insists that these aspirations do not imply that the movement is gearing up to aggressively compete against other financial institutions.

"It's not a matter of confrontation, but rather more a move towards greater co-operation with banks and building societies. By introducing our members to their ATM networks, we will be providing them with a critical mass. And if a member of a credit union wants to take out money anywhere in the Republic, we are more than happy to enter contracts with AIB, Bank of Ireland or whoever to do that," says Mr Smyth.

When the league initially met the Minister to advance the Bill, it brought just under 80 amendments to officials at the Department of Enterprise and Employment for consideration.

To date, the Minister has accepted around 14 of their suggested amendments and granted some concessions in many key areas.

The Bill is now expected to go to committee stage in the Dail on April 8th.