Credit Unions - The Future for Banking in Ireland ?

Are Credit Unions the banking model that people, rather than bankers, want?

The differences between banks and credit unions are that

• Credit unions are owned by all their members. One Member One Vote.
  
• Every Credit Union is a ‘not-for-profit’ financial co-operative.
  
• Surplus income generated is returned to the members as a dividend to savers and interest-rebate to borrowers or it may be directed to improved or additional services for members.
  
• Membership of a Credit Union is open to people who have, in relation to all other members, a unique ‘common bond’.
  
• There are no transaction charges on loans or saving accounts.
  
• Loans are insured at no direct cost to the eligible member.
  
• Savings are insured at no direct cost to the eligible member.
  
• Flexibility -you can repay a credit union loan earlier or make larger repayments than agreed with no penalty.
  
• Additional lump sum repayments are accepted with no penalty.
  
• The Credit Union also works in co-operation with the local community.
  
• There is also a wide-range of insurance services for members.
  

At €700 million Credit Unions are the leading provider of Social Finance in Ireland, the provision of finance that responds as much, and very often more, to the environment and social returns as to the financial return. The benefits to the community of this type of lending are enormous. These include employment, community, education and environmental enhancement but there are also economic advantages that the credit union may reap.
As Irish credit unions have progressed over the past 50 years, they have also begun to play a growing role in fighting poverty in some of the most deprived and needy places in the world…. by expanding the credit union self-help concept and supporting young credit unions and credit union start-ups and developments… in places like Ethiopia, The Gambia, Sri Lanka, Peru, Kenya, Malawi, Guatemala, Nigeria, The Caribbean, Albania and even Russia. [

Currently Irish credit unions are sending over €1m a year overseas in support of deprived local communities through the ILCU Foundation; Irish micro-finance at work overseas!

Credit Unions say they now have a double protection compared to the Banks

— They have the €100,000 savings guarantee announced by the Minister for Finance

— They also have the backing of their own unique €110 million fund

Average Credit Union savings are between €4,000 and €5,000 euro.

http://www.business2000.ie/cases/cases_6th/case1.htm

http://www.ilcu.ie/publisher/index.jsp?re=0&pID=93&nID=603&aID=2367

In principle, it looks like the credit union might be the way to go, even though they are not set up to provide larger business loans and don't operate cheque books or credit cards off their accounts.

There is also a very big question in my mind as to where they are holding their funds and how safe and wisely invested they are - there was a very worrying incident recently in which a Stock Broking firm had to reimburse the Credit Unions because they were sold very inappropriate Bonds that appeared to be unsaleable.

The Credit Union models seems excellent, but can it be insulated from the madness of the rest of the Finance Sector?

I credit unions!

It is an excellent movement, and banking model. One which responds to the needs of small communities and low/medium earners.

I'd like to see more young people borrow from credit unions and getting involved, as the age profile is quite high.

On the point of credit cards and cheque books.. The EU is hoping to phase out cheque books over the next decade. This is something small businesses support and the Greens are pushing it at a national level. It makes sense to move to electronic payments.

On credit cards, perhaps it is no bad thing that credit unions don't offer them?

Some now offer ATM cards, and I expect laser cards will be offered within 3 years (perhaps in partnership with BNP Paribas).

I'm also delighted to see the League of Credit Unions finally advertising on TV. This is something I've argued for, for years, but got nowhere.

eoinmn wrote:I credit unions!

It is an excellent movement, and banking model. One which responds to the needs of small communities and low/medium earners.

I'd like to see more young people borrow from credit unions and getting involved, as the age profile is quite high.

On the point of credit cards and cheque books.. The EU is hoping to phase out cheque books over the next decade. This is something small businesses support and the Greens are pushing it at a national level. It makes sense to move to electronic payments.

On credit cards, perhaps it is no bad thing that credit unions don't offer them?

Some now offer ATM cards, and I expect laser cards will be offered within 3 years (perhaps in partnership with BNP Paribas).

I'm also delighted to see the League of Credit Unions finally advertising on TV. This is something I've argued for, for years, but got nowhere.

In some European countries Credit Unions are used by small businesses, not only personal borrowing and saving. Could that happen in Ireland too?
I'd say a lot of small businesses would move to the CUs if the services were there.

It was always one of Devalera's great aims that the Credit Union should be the centre of banking in Ireland.

Bump indeed. My financial hopes are pinned on the Credit Unions, though I become suspicious when I read such uncritical eulogies as seen above. Is there not some small discreditable thing they do? I like that Dev liked them, now that he's been re-habilitated.

905 wrote:Bump indeed. My financial hopes are pinned on the Credit Unions, though I become suspicious when I read such uncritical eulogies as seen above. Is there not some small discreditable thing they do? I like that Dev liked them, now that he's been re-habilitated.

They are vulnerable to mismanagement and and being scammed the same as everyone. They seem to have bought a gigantic litter of puppies from Davy Stockbrokers without reading the small print.
Any institution is only as good as its management and oversight.

As an user of their services, I'd have nothing but praise.