Sir, – Fintan O’Toole notes a servile attitude in Government policy towards the banks and a punitive one towards community-based credit unions (“State shafted credit unions and bowed to millionaires”, Opinion & Analysis, July 9th).
What we are now witnessing is the continuation of a Government policy backed by the Central Bank to further punish the credit unions, which Mr O’Toole notes are “the only Irish financial institutions that haven’t disgraced themselves”.
Right now there are strong credit unions forced to accept unrealistic lending limits. Sound credit unions with surplus funds are being prevented from lending to good risk members and instead are being forced to deposit their funds in the kind of risky banks they would not have been permitted to deal with in the past.
This results in credit unions being forced to take 1.5 per cent interest instead of a much higher rate from lending to members. I have evidence of soundly operating credit unions being prevented from advancing funds to financially secure members seeking, for example, a small-scale loan to pay the deposit on accommodation for a third-level student going to college, as it would put them over the imposed credit limit.
This arbitrary policy, which is not based on prudent lending practice, is just one of the short-sighted actions by Government. An even more serious interference is the attempt by the Central Bank, in pursuance of the Government policy to support the banks and to force credit unions to take a subordinate position to these discredited financial institutions, in seeking earlier repayment of loans from members.
Bad government policy in the past and inept supervision of regulatory authorities landed the country in its present financial predicament. Why should these same institutions be permitted to continue in their seeming objective of undermining credit unions, which have been, and remain, a bulwark against predatory banks and unscrupulous moneylenders? – Yours, etc,
DECLAN MacPARTLIN,
Camolin,
Enniscorthy,
Co Wexford.