Credit union in Cork City to introduce charges on transactions

First South Credit Union is set to introduce a €1 charge for each individual transaction

First South Credit Union on South Mall in Cork City

A credit union in Cork City is set to introduce fees on transactions made by members.

First South Credit Union, which has branches in Ballyphehane, Kinsale, South Mall, Turners Cross and Dillons Cross is set to introduce a €1 charge for each individual transaction.

The charge will apply to both electronic and in-person transactions, however there will be no charge on loan repayments.

The charges are set to be introduced from February 1, 2021. Members under the age of 19, and students under 26 who are in full-time education will be exempt.

Members will also have the option to pay a subscription instead of the €1 charge for every transaction.

A €4 per month (€48 a year) fixed fee will see those who sign up become Full Service Members.

This option will allow customers “the freedom to continue using your Credit Union for unlimited in-person transactions, electronic transactions with the option of a current account without incurring an additional monthly fixed fee.   

“Full Service Members will have full online access to their accounts, with the ability to transfer funds electronically 24/7.” In a letter to members, First South CEO George Cantwell said that financial landscape “has changed considerably” in the last five years.

"Our Credit Union model is built on providing safe Savings Accounts and competitive Loan Products to our Members," he explained.

"Where Savings are not used to fund lending, they are placed in secure investments. Historically we have received a reasonable return on these investments and the income earned on investments, coupled with the interest received on loans, allowed us to cover the expenses necessary to keep our service levels at a very high standard, increase our reserves and indeed make a return to our Members by way of Dividend.

“The returns on investments are extremely low, and in some cases the Credit Union is being charged a negative interest rate,” he said.

“In order to maintain our service levels, we will introduce Fees & Charges from 1 February 2021.” Mr Cantwell added that he felt the two different charging options offered members the freedom to pick the most suitable option.

"Although we are introducing fees as a matter of necessity, the charging options as outlined above will allow our Members the freedom to choose the most suitable option for their requirements.

"We believe that the Full Service Membership represents great value, particularly when compared with the fees of other financial institutions.

"I appreciate that the introduction of charges is something that everyone would like to avoid but it is important to re-emphasise that all income generated by this Credit Union is used to provide the service levels that are utilised and valued by our Members on a continuous basis."

Mr Cantwell told the Irish Examiner that while customers had been "broadly disappointed" with the introduction of charges, many appreciated the need for them.