Credit unions bail out borrowers

PEOPLE in debt to other financial institutions are turning to credit unions to bail them out, according to John O'Regan, president of the Irish League of Credit Unions.

Mr O'Regan, who will address the AGM of the credit union movement today, said the economic slowdown can be felt in branches countrywide.

He said demands for loans were on the increase, with members coming under pressure to honour loan commitments.

"With the chill that has come after the Celtic Tiger, it is credit unions who are being asked to come to the rescue. The ills of the economic climate are always felt first in credit unions. And we're seeing more and more of it.

"People turn to their credit union within their own community when the going gets difficult. There's anecdotal evidence from a lot of our 534 affiliated member branches that people are coming under increasing financial pressure," Mr O'Regan said.

Many people are running into difficulties because they borrowed too much when times were very good.

Others are struggling at this time of the year to meet the cost of events such as Communions and Confirmations. And its not just those at the lower end of the economic scale who are feeling the pinch.

"Credit unions are there at all times for all members, when the economic winds blow mild, warm or cool," said Mr O'Regan. "There is evidence that people are coming under more and more financial pressure."

But for credit unions, people would have become increasingly indebted to high-cost loans from money lenders, or other institutions which charge exceptionally high interest rates.

And although credit unions have reduced the opportunities for money lenders, they are still there to a certain extent, Mr O'Regan said.

Much of today's annual delegate conference will be held in camera. Key items on the agenda include the review commission report and the progress made since the recommendations for change within the movement, first mooted last June.

Also on the agenda is the expected impact of the Irish Financial Services Single Regulatory Authority. The movement has set up its own monitoring and self regulatory processes and is keen to avoid disruption to these.