Credit Unions, the good and bad all at once

This week I’ll be doing some work with the Irish League of Credit Unions, a group who I’m sure I frustrate a lot as I have been vocal in saying it was bad financial planning when people paying unsecured debts (like CU loans) while not paying their mortgages.

On the other hand – and the bit that I don’t really get to articulate, is the importance of credit unions as a source of thrift, savings and credit. They occupy a similar space to the one held by Community Banks in the USA and while they lack the sophistication in many ways that banks have, we also didn’t have to rob €65,000,000,000 from future generations to ensure they lasted. It is also true that we didn’t pay off unsecured creditors of the Credit Unions, so morally they hold the highest ground out of any of our financial institutions.

But morality is only one consideration, they also have serious problems, and the Central Bank refused to give me a figure this week of the number of credit unions who didn’t hold an AGM for year ending September 2012 – because this is one of the tell tale signs that there is a problem. So in short, perhaps we should be thinking of giving credit unions more ‘bank like’ capacity so that the next time we repeat a banking crisis (see the main article if you think we won’t!) that there are some good guys left to rely upon.

This is the unedited version of an article which appeared in the Sun on Sunday 12th May 2013 in our Mr. Money column

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