Credit union body to reconsider plan

Member credit unions of the breakaway Credit Union Development Association (Cuda) have rejected a funding proposal linked to a shift in the focus of the organisation. The association, whose members have approximately €1.6 billion in assets, now has to hold a reconvened meeting within three weeks to put the issue to a vote again.

The funding proposal for 2007 is linked to a major shift in focus that is being proposed by the association to its membership. The association's executive wants to shift away from offering services to its member unions and focus on representative and lobbying activity. The association proposed funding for its operations in 2007 of approximately half a million euro, which would be brought up to €800,000 through the use of savings accumulated by the association.

Cuda currently represents 15 credit unions countrywide, which in aggregate comprise almost 350,000 members and approximately €1.6 billion in assets. Its membership includes some of the largest credit unions in the State.

A proposal for a "significant growth and development plan" which would allow the "ramping up of the organisation" was put to the weekend meeting in Kilkenny. "It is about changing the focus of the organisation towards trade association activities," said Cuda chief executive Bill Hobbs.

Cuda is a breakaway body from the Irish League of Credit Unions. It believes that the credit union movement's structures and business model need to be updated. The association was set up in 2002. Since then it has lost one member, Dundrum Credit Union, and has not gained any new members. The association's executive believes that new structures are required if new members are to be won.

In a report last year Cuda called for the reform of the credit union movement. The association said that its members' assets made up 15 per cent of the €12 billion in assets held by credit unions in Ireland. Mr Hobbs said last year that the savings protection scheme associated with the league was not an appropriate vehicle to protect the savings of credit union members because the scheme's primary function was to protect credit unions. He said that only a simple amendment to the law was required to include credit unions in the compensation scheme which covers banks and building societies.

Figures released this week by the BusinessPro Credit Bureau showed that, for the first time in six years, the collective volume of judgments obtained by credit unions exceeded those obtained by the Bank of Ireland, with a total of 2,321 judgments valued at €17 million.

"Credit unions are demonstrating just how seriously they take the threat to members' funds from credit defaulters; most of the major credit unions are now thoroughly checking out the credentials of prospective borrowers, and they are using legal enforcement techniques on the individuals who will not pay," said BusinessPro managing director James Treacy.