Credit unions set to go electronic

CREDIT unions are to offer debit cards and electronic transfers in a move described as the biggest single change to the movement in decades.

Delegates approved plans for the new payment service at the Irish League of Credit Unions AGM held at the University of Limerick over the weekend.

The establishment of a Credit Union Services Organisation (CUSO) was one of the key issues discussed at the AGM attended by 1,500 delegates representing 505 credit unions across Ireland.

“With CUSO approved at AGM 2010, it will be the biggest thing to hit the movement in decades answering the calls from members and non members alike about access to payments solutions, specifically electronic debit transfers, electronic credit transfers and debit cards “ explained ILCU president Mark Bailey.

Kieron Brennan, CEO of the Irish League of Credit Unions, described the decision as “momentous”.

He said the need to establish new payment options was required by customers.

“This is coming from calls we are getting from our members. They are saying to us they have lost faith in other financial institutions and the level of trust they have in credit unions is at an all-time high and they would like to have more access to a bigger range of financial services through our credit unions,” said Mr Brennan.

CUSO will allow credit union members to send and receive payments electronically to other credit union and bank accounts.

Currently, less than 10% of ILCU affiliated credit unions have the ability to undertake Electronic Funds Transfers (EFT) and only 5% can provide debit cards.

In his address at the weekend Mr Bailey urged for co-operation and commitment to change from the group’s members.

Meanwhile, the Financial Regulator, who addressed the AGM, has warned credit unions to remain vigilant as they brace themselves for another challenging year for the movement.

Matthew Elderfield said credit unions will face further pressures because of the extraordinary economic circumstances facing Ireland and warned they are in the “front line of the battle to ensure these problems are kept at bay”.

“In a difficult economic environment, credit union loan arrears have risen sharply over the last two years and the level of rescheduled loans has also risen as your members have come under increasing financial strain,” he said.

“2010 will be another challenging year. As your members face difficult times, credit unions will have to remain vigilant. The impact of high unemployment and weak economic growth on the sector will be inevitably significant.”