Credit Unions can and will become the primary financial institution of choice
Posted on: 22 Apr 2023
The Irish League of Credit Unions (ILCU) is this weekend holding its 2023 AGM at the INEC in Killarney. Jennifer Carroll MacNeill, T.D. Minister for State with responsibility for Financial Services, Credit Unions and Insurance at the Department of Finance will address the AGM, the theme of which is ‘Ambition to Action’.
Speaking at the AGM, David Malone CEO of the Irish League of Credit Unions stated the ambition of credit unions to become the primary financial institution of choice in communities across Ireland pointing to the opportunities provided by the new credit union legislation. However, he also called in parallel for a review of credit union regulations in respect of regulatory capital, liquidity and lending limits applied to mortgage and business lending which can provide a platform for credit unions to unlock their full potential and provide much needed choice to consumers.
Mr Malone commented, “The credit union sector is at a momentous point, the Irish financial services sector has evolved, and we are now more relevant than ever during our sixty plus years. We are member owned financial services providers, in over 500 locations across the island of Ireland with a unique focus on communities.
“With retail banks exiting the market and pillar banks retrenching and reducing their footprints, credit unions are increasing their future commitment to existing and new members. Credit unions offer a genuine alternative to Irish consumers and are evolving to meet their future needs, broadening their range of loan offerings to include personal loans, mortgages, business loans, secured and unsecured, community and agricultural loans.
Mr Malone continued, “This future focus is driven by ambition, built on existing public trust, and anchored in ongoing innovation across the credit union sector. Credit unions across the island of Ireland today count approximately 3.6 million people as members and in the last year, the movement has provided 200,000 loans of less than €2,000, helping people navigate the daily challenges from the cost-of-living crisis.
“We are present and active in communities day-to-day. With over a 40% leading market share in personal lending and an increased focus on growing our footprint and providing much needed competition and choice in the mortgage and SME lending markets – we are ambitious. We understand that this can only be realised through innovation, which our member unions are driving. Today, many credit unions are increasing their digital member and loan application services, complimented by the opportunity for face-to-face contact and instant phone access.
“We firmly believe that the credit union sector will play a pivotal role in Irelands financial services future, which will be made possible by the new Credit Union Amendment Bill which provides us with a platform to realise our full potential. Minister Carroll McNeill and her predecessor, Minister Fleming, have been instrumental in supporting this legislative change. Groups of credit unions will now be able to come together and collectively pool their resources by investing in back off functions which will make it more cost effective and economical for credit unions to provide a wider range of services. In addition, the Bill will also enable credit unions for the first time to refer members to other credit unions if they do not offer a particular product — and to also co-lend with other credit unions. These changes will benefit the consumer and thus need to be progressed.
Mr Malone concluded, “There is a collective vision for credit unions and while the new Bill delivers future opportunity, the sector could do even more if it were subject to fairer and more proportionate regulations. We need a review of credit union regulations in respect of regulatory capital, liquidity and lending limits applied to mortgage and business lending. This would provide a platform for credit unions to unlock their potential and provide much needed choice to consumers in a highly concentrated banking sector. Credit unions are highly regulated, well run, well capitalised, trusted and member focused financial services providers that are committed to Irish communities, whose ambition needs to be supported”.