Credit told to curtail lending as arrears rise 22%

[lostexpectation]

Irish Examiner - 2009/02/26: Credit union lending under threat CREDIT UNIONS could be forced to curtail their lending after loan arrears soared by 22% to €515 million. Irish credit unions — which have three million members with savings of e11.9 billion — were forced to write off e284m in bad debts last year. It has also emerged that 115 individual credit unions — almost one in three — are running at a loss. The office of the registrar was anxious, however, to point out that the vast majority of these credit unions

At that time Mr Logue told the Credit Union Development Association AGM: “To those boards which have been engaged in the provision of loans for purposes and for amounts which would never have been regarded as normal for the business of a credit union, I have this to say: please stop trying to be banks. Lending for commercial property, project finance or mainline business activity is not the business of credit unions and is not in the interests of members.”

have they being doing this?

[Eddie Batt]

I worked for a small company a few years ago -the boss lodged ten and twenty grand in credit union cheques over the space of a couple of months when things got hairy for a while.

[Evestown2]

If Credit Unions hold back on lending to people the poorest will have very little access to money except through moneylenders.

[leroy42]

Evestown2
That is exactly the point. The CU has been warned that lending for business activities etc is not the business of the CU. By stoping this lending, which is the business of the banks, it will free up money for the 'poorest' to allow them to stay away from the loan sharks.

This was the reason why the CU was set up in first place, but like everything in Ireland in the last decade, you were nobody if you didn't get involved in property.

Time to get back to doing the core activity and leave the rest to others (whether they are more qualified is of course open to some debate!)

[Evestown2]

I should have read TFA. Thanks for the clarification.

[ManOfReason]

The Credit Unions were included in the 100,000 Euro deposit guarantee last year - even though they previously had zero government guarantee. Lets hope stupid decisions by credit unions don't turn out to be another drain on the already hemorrhaging state coffers.

RTÉ Business: Ombudsman has credit union concerns