Credit Unions Say Savings Are Safe

The Irish League of Credit Unions is assuring its members their savings are safe despite a review on the sector being called.

Chief Executive of the League, Kieron Brennan made the assurance after it was announced consultancy firm Grant Thornton would be appointed to carry out a review as the sector accrues an increasing number of bad debts.

Speaking on RTÉ radio this morning, Mr Brennan said credit unions had performed extremely well throughout the financial crisis and that, in stark contrast to the banks, they did not have to be bailed out.

Mr Brennan said he expected the review would find Credit Unions to be safe, strong and secure.

"The movement is a large and diverse one with 500 credit unions north and south, and we would expect that not all of those will necessarily be operating to the peak level of efficiency," he said.

However, he did admit there were increasing bad debts across the credit union movement.

Yesterday, the Central Bank and Financial Regulator revealed the review was requested by the Minister for Finance to assist in the development of a modern credit union sector, identifying the legislative and regulatory framework required to build a strong and sustainable sector. The first phase will concentrate on establishing the financial position and risk profile of the credit union sector.

Speaking yesterday, James O’Brien, Registrar of Credit Unions said: "We would encourage credit unions to engage positively with the review. It offers a significant opportunity for all credit unions, large, medium and small, and the sector as a whole to develop a robust and sustainable business model. To support and encourage this outcome, our regulatory focus over the next few years will be based on the principle of ‘strong credit unions in safe hands."

During this morning's radio broadcast, Mr Brennan did not say exactly how many credit unions were in financial trouble but said that across the whole movement, up to 13 per cent of the €6.8 million it had lent to customers were bad debts.

(DW/KMcA)