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Consumers & Minister’s advice at one in supporting Credit Union development

In 2016 the Minister’s Advisory Committee took the brave decision to review the implementation status of the recommendations made by the Commission on Credit Unions back in 2012 and reported specific areas where proposals were not introduced and may be negatively impacting credit unions’ business development.

Commenting on the report, Kevin Johnson CEO of CUDA said, “In recent years it has been widely reported that credit unions should develop their business models and grow income in a prudent manner and these proposals will contribute to that objective. This is supported by a survey of 1,000 consumers conducted by iReach just before Christmas, which found that the majority or 74% of adults believe that Credit Unions could have either a big or some impact on the banking market in Ireland and should pool their resources to compete with banks.”

In welcoming this report, CUDA commended the work of CUAC, the Implementation Group and the stewardship provided by the Department of Finance. CUDA now hopes that the Registrar of Credit Unions will embrace the proposals contained in the report, in particular implement the proposals that will see credit unions with the skills and financial strength being permitted to provide more credit, and indeed making different forms of credit accessible to more people.

Kevin went on to say, “Credit unions have demonstrated incredible resilience throughout the recession, and this can be attributed to good governance and compliance with relevant regulation and sees them rightly occupy a position of a trusted advisor to their members. They have earned the right to have legislation and regulations that mirror this, in particular the lending proposals in the report including the basis of the calculation of permitted limits.”

CUDA has for some time advocated the position to set aside a one size fits all regulatory approach and endorse the proposal that when new regulations are being introduced the principle of not restricting any Credit Union from services, or limits, they can currently provide for their members, with automatic inclusion in higher tier for Credit Unions of a certain size and risk profile, and clarity in any approval process. CUDA also calls on all stakeholders to consider modernisation of credit union legislation, such as the common bond, to deal with anomalies that are unintentionally preventing some members, or potential members, access to credit union services.

CUDA will be communicating directly with current serving Government Ministers to reassure them of the prudence of all the proposals, as endorsed by their colleague and Minister for Finance, and how these are appropriate to allow more people experience the benefit of not-for-profit mandate of credit unions and their volunteer ethos and community focus, while giving due regard to the need to fully protect members’ savings and financial stability.

Note to the Editor

CUDA, the Credit Union Development Association, was legally incorporated in 2003. In its early days it was the representative voice, on behalf of its owner member credit unions, with legislators and regulators. It has since evolved and now, as well as providing a ‘voice’, it is increasingly providing support facilities in the areas of regulatory compliance, risk management, shared services and competency development.

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CUDA Welcomes CUAC Report

 CUDA welcomes CUAC report

 Modernising Credit Union Lending rules will deliver real value in mortgages and personal loans

The representative body for Credit Unions CUDA has welcomed the publication of the CUAC report which reviewed the implementation of the recommendations in the Commission on Credit Unions.

Commenting on the findings, Kevin Johnson, CEO of CUDA, “The report highlights the long overdue need to review the current credit union lending limits. Modernising these will deliver better value for consumers in personal loans, mortgages and other financial services areas, something that the Government acknowledges is sorely missing in our economy.

We are also pleased to see our call has been listened to – we have long been advocating for a change in the outdated long-term lending limits to more accurately reflect consumer demands and the current financial environment”.

CUDA has also strongly campaigned for changes to be implemented that will allow Credit Unions to immediately provide funds for social and affordable housing, thereby helping to meet the serious supply problems facing prospective home buyers.

Kevin went on to explain, “Fundamentally, Credit Unions offering a full range of account and financial services, from personal loans to mortgages and savings to pensions, will drive greater competition. This will lead to lower cost products which can only be good for all consumers and which is all but absent from the market at the moment. We look forward to working with the proposed Implementation Group to make this a reality.”

The representative body say that an aspect of the report that struck them was that “the need for leadership at the centre and an understanding of the risks involved in longer-term lending were flagged by the Central Bank as areas of concern for credit unions seeking to move in this direction.”

Kevin commented, “This is something we are firmly behind and we have made great strides in this regard with the establishment of the “Solution Centre” which facilitates collaboration, innovation and business development”.

The Solution Centre, which is open to all credit unions, comprises a selection of the country’s strongest credit unions and is a hothouse unit developing specialist products, supports and solutions.

Kevin went on to say, “We have already delivered a number of projects that were drawn from the objectives of participating Credit Unions strategic plans. One of the first of these products will be supporting a mortgage offering which is expected to be available in August to participating credit unions representing approximately 25% of credit union members”.

CUDA says the report also correctly acknowledges the great work of all stakeholders which is resulting in ever strengthening Credit Unions.

Kevin concluded, “We thank the CUAC for the thoughtful consideration they have given to our proposals. Credit Unions continue to grow their market share of the consumer loan market and, now with strong capital, stronger governance and greater capabilities, they are fantastically positioned to broaden the range of services they offer to current and potential members”.

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