Credit union restriction was warranted

HAD credit unions been regulated, governed and managed to standards found elsewhere, they would not need to be bailed out by the state. Recent criticism of the Central Bank’s intervention to stabilise credit unions is both unfounded and unwarranted.

About 100 credit unions — one in every four — are no longer fully functioning credit institution as they are unable to pay dividends. Along with two hundred others, they have had their lending restricted by their regulator.

When credit unions can no longer function, they are either closed down or their business is transferred to viable operations. And as it costs money to do this, if credit unions don’t have it, the state typically funds it.