Thursday, 10 November 2011

Credit Unions Ready for a New Era

There has been much discussion and public debate about the credit union movement’s current state and its future role and development. This has been informed in part by the Interim Report from the Commission on Credit Unions which was set up at the behest of the ILCU by the government, to make recommendations regarding the strengthening of the regulatory framework for credit unions and to inform the preparation of credit union legislation to be published by year-end 2011. The Commission’s Interim Report gives an overview of the Credit Union Movement, the current financial position and makes specific recommendations with regard to; deposit protection, resolution, stabilisation and liquidity, governance of credit unions and regulation of credit unions.
 
The Commission concludes that; “While the challenges faced by the credit union sector are significant, they are not insurmountable”,  
and also states that; “A strengthened and revitalised sector can be in a position to play an increasing role in the retail financial landscape”.
 
The initial recommendations of the Commission are to be welcomed and they fulfil the Commission’s mandate with regard to strengthening the regulatory framework and informing new legislation and will lay the foundation for strengthening and revitalising credit unions and lead to credit unions playing an increasing role in providing financial services to members.
 
Just what that role will be, will be greatly determined by the full implementation of the Interim Commission’s Report recommendations in the short term and the second phase of the Commission’s work which will set out a strategy for the future evolution of the credit union movement.
 
The Irish League of Credit Unions wants the Irish Credit Union Movement to provide a full range of financial services to its members and all who wish to avail of such services. We believe that this can be achieved through a regulatory and legislative framework that:
 
·         Facilitates the delivery of a full range of personal financial services to all members
·         Creates the flexibility which will allow for various models of credit union development
·         Enables and encourages various forms of cooperation among credit unions
·         Preserves the movement’s social, volunteer and community ethos
·         Preserves local identity and autonomy while enabling credit unions be a part of greater movement cooperative alliances
·         Facilitates the creation of movement owned infrastructures in information technology, payments and other appropriate areas to achieve the above.
 
While our members struggle with the severe personal impacts of the current economic climate, their credit unions are doing their best to serve them and will continue to do so in the proud tradition of “not for profit but for service” that has been the movement’s hall mark for over 50 years.
 
“Credit Unions play a crucial role in helping to meet the financial, economic and social needs of many people. Recent adverse financial and economic conditions allied with internal governance weaknesses and the absence of an appropriate regulatory framework have contributed to the significant issues facing the sector”.
 
We must all play a part in overcoming the difficulties and challenges we now face. We must grasp the opportunity that now presents itself to chart significant reform and lay the foundation for future development. 
 
The Credit Union Movement will build on the successes and lessons of the past to ensure that credit unions continue to play a crucial role in meeting the financial, economic and social needs of our members, we will ensure that the necessary reforms and developments take place.