Troubled times for credit union
In addition to public funding, the credit union has had restrictive action taken by the financial regulator in curbing the amount of money it can give out. This has resulted in opposition from within the union, but surely should be seen as a blessing in disguise in these unpredictable financial times. The credit union is now in the process of pursuing many defaulters, with large credit unions owed a fortune by their members. If this means that credit is not as plentiful as it used to be, then that is the medicine that needs to be taken.
The credit union has been at the heart of the community, but whether it will always remain that way is a far reaching question. The problem with the credit union is that it has been perhaps too focused on credit in recent times and not enough on the savers who are the backbone of the union. The credit union has been expanding and diversifying into areas that were previously thought to be out of bounds and unsuited to its genre. It has been getting into big money areas such as mortgages and business loans, which are high risk areas and could pose considerable strain on the institutions.
No financial institution is “too big to fail” and the credit union is no exception. It has done a lot to help people, but in the times we live in, no one is immune from failure. By all means the credit union should modernise and offer more services to its members, but remain a modest and conservative financial institution, which is not exactly the case at the moment with too much red on its books.
The credit union should always remain at the heart of the community and not be metamorphosed into a commercial-style bank and the problems that go with them. The Government’s decision to curb lending in the credit union and recapitalise failing branches is surely in the interest of all to protect an old and dear friend of the nation.
Maurice Fitzgerald
Shanbally
Co Cork
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