THE APPOINTMENT of independent consultants to carry out a review of the credit union sector in Ireland has been welcomed by the Irish League of Credit Unions.
Chief executive of the Irish League of Credit Unions, Kieron Brennan, said he sees the review as an opportunity to strengthen the credit union movement, and allow it to take a more influential position in Irish society.
Speaking on RTÉ radio yesterday, Mr Brennan admitted that there were increasing bad debts across the credit union movement. He sought to reassure customers that their savings are safe.
“On the whole I think we would expect the review to find that credit unions are safe, strong and secure. But, I have to say, the movement is a large and diverse one with 500 credit unions north and south, and we would expect that not all of those will necessarily be operating to the peak level of efficiency,” he said.
Mr Brennan was unable to say exactly how many credit unions were in financial trouble but said that across the whole movement, up to 13 per cent of the €6.8 billion it had lent to customers were bad debts.
“Let’s be clear there are increasing bad debts across the credit union movement. We wouldn’t argue with that. We’ve seen those figures, they are a concern,” he said.
He said that in comparison to other financial institutions, credit unions were in good shape.
“Credit unions have performed extremely well throughout this financial crisis. In sharp contrast to the banks, they have not had to be bailed out, they have not had to have a Nama and no single cent of taxpayers money has gone into credit unions.”
The Central Bank and Financial Regulator yesterday announced the appointment of Grant Thornton to conduct the new review, which was requested by Minister for Finance Brian Lenihan.
“In the current challenging economic environment it is important in the interest of members and the sector as a whole that there is a strong and healthy credit union sector,” the Central Bank said.
“The significance and scale of the sector means that the regulatory regime has to be adapted to ensure credit unions remain viable in a new financial environment.”
