Sir, – There is much to commend the objectives of the original instigators of the credit union movement. However, the credit unions of the 21st century are very different to those of the 20th century.
Recent letters (August 24th, 26th, September 2nd) have all avoided acknowledging the drop in the number of credit unions in Ireland since 2008, nor do they address why those numbers have collapsed.
The reason that many credit unions disappeared is that they were forced into mergers resulting from poor loan practices during the Celtic Tiger years. Those poor decisions were at a time when they could not provide mortgages and so were not directly exposed to the housing crisis, yet they still had to be rescued.
Those credit unions were just like those of today, not for profit and seeking to offer loans to service their communities. Credit unions made and still place huge emphasis on their local knowledge and connection to communities, neither of which prevented a lot of them from making very poor lending decisions. These errors undermined their financial viability and led to their demise.
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There has never been a public accounting of what actually happened with each of the credit unions that disappeared. In many cases, the ordinary members never saw and never will see comprehensive accounts for the last few years of their credit unions before they were subsumed. The credit union movement has never held its hands up in the same way that the banks were rightly made to do.
That does not sound like a sector that has learned any lessons at all, nor one that should be enabled to increase its exposure to the housing market. – Yours, etc,
DANIEL K SULLIVAN,
Marino,
Dublin 3.
