All Posts By

Michael Fortune

Balance Sheet Management and Applying Savings Caps Retrospectively

By | Info Briefing

In recent months there has been some discussions on the practice of applying savings caps below €100,000, and, more specifically, applying savings caps retrospectively to members. Some credit unions have already taken the decision to apply a savings cap and member savings have been reduced accordingly.

CUDA has investigated this matter, had discussions with credit unions and has taken independent legal advice on the practice of applying savings caps retrospectively. We received some encouraging feedback.

If any credit union is considering introducing a savings cap as part of your balance sheet management please speak to us  kevin.Johnson@cuda.ie or elaine.larke@cuda.ie as there are a number of considerations to take on board and we will be happy to assist you and speak further to you in this regard.

Prepared by Elaine Larke

As part of our research, it was with interest that CUDA noted in the Central Bank of Ireland’s Resolution Report for Drumcondra and District Credit Union (Section 3.22) the following paragraph:

RCU engaged with Drumcondra on the immediate viability risks identified in the 2018 PRISM Engagement and in January 2019, Drumcondra submitted an updated strategic plan, which outlined both a ToE strategy and a strategy to remain on a standalone basis…In addition, the updated strategic plan confirmed that Drumcondra had made the decision to implement a further savings cap of €15k, which would be applied retrospectively. The draft accounts at Section 2.3 show savings reduced from €14.1M in 2018 to €12.9M in 2019”

Proposed amendments relating to AGMs/SGMs

By | Info Briefing

The Minister for Finance will consider making amendments to the Credit Union Act 1997, as amended, to allow certainty for credit unions that are contemplating holding partly or wholly virtual AGMs/SGMs, and to consider legislative change for proxy voting. Similar measures are being progressed in the Companies Act General Scheme of the Companies and Industrial and Provident Societies (Covid-19)(Amendment) Bill 2020). The Minister is also considering introducing an amendment to confirm that credit unions can issue AGM/SGM notifications to members via electronic means in a manner similar to that in the Companies Act 2014, Section 218. This amendment allows the legislation to catch up with credit union accepted practice

The Dept of Finance had sought feedback on a number of initial questions relating to the legislative amendments, which we had captured in our Briefing Note of the 30th July 2020, and a sincere thank you for coming back to our questionnaire on the proposed amendments.

When we can actually share the draft wording of the legislative amendments the picture will start to become clearer. As soon as we have the proposed amendments, we will circulate them to you. However, the planning for partly or wholly virtual AGMs should start now. Credit unions cannot wait until legislation is drafted to start the planning process of organising virtual  AGMs. The one area currently outside our remit that we cannot plan for is proxy voting, which will need a specific legislative amendment.

In the meanwhile, CUDA proposes holding a series of discussion groups / workshops for owner member credit unions to help with and coordinate the following:   

  • Define a compliant virtual AGM mechanism
  • Agree approaches, determine risks and consider solutions
  • Standardise as much as possible

Face Coverings in Credit Unions

By | Info Briefing

S.I. No. 296 of 2020 Health Act 1947 (section 31A – Temporary Restrictions) (Face Coverings in Certain Premises and Businesses) Regulations 2020

For some time, the Government announcements and press releases have prepared us for the mandatory requirement to wear face coverings in shops, retail units and other relevant premises from Monday, 10th August 2020. Until this weekend (8th August 2020), we did not have a definition of “relevant premises” and did not know if it would include credit union banking halls and other spaces accessible by members.

The Regulations are now published, and the uncertainty clarified.  Please note that credit unions, banks and post offices are specifically excluded from compliance with these Regulations. I attach S.I. No. 296 of 2020 for your perusal.

It is somewhat of an unusual decision considering that credit unions and banks are included in the UK equivalent legislation. We also know that many banks were gearing up last week for the commencement of the new Regulations.

From speaking with you, I know some were in favour of a mandatory requirement under these particular Regulations, whilst others were not. It is important to note, that the exclusion of credit unions from compliance with these Regulations does not affect any decision your credit union has put in place or intends to put in place, on the grounds of health and safety, with regard to the wearing of face masks by staff and members entering our premises. Please see Return to Work Safely Protocol (May 2020) and other public health guidance on the HSE.ie website for more information.

Prepared by Elaine Larke

10th August 2020

Stabilisation Levy under review by the Department of Finance

By | Info Briefing

In our Briefing Note of the 7th July 2020 we highlighted the review being carried out by the Department of Finance on the stabilisation levy. We also asked you a number of questions to get your thoughts on the levy and on the Stabilisation Scheme overall. Thank you for your responses. As a result, we have made the following recommendations to the Department of Finance:

That the levy is set at 0%,

That the Fund has now reached an appropriate target size (ie €18.68m), and

That the Fund is dissolved in 3 years if the structure of the Scheme is not amended and/or no credit union has gained financial support from the Fund.

The full CUDA submission is here

Thank you all,

Elaine Larke

Update Small Business Lending Project

By | Owner Members, Strategic Development

As part of the CUDA Strategic Plan we committed to facilitating a project to design and develop a small business lending framework. The project, currently a collaboration of three credit unions and the Project Lead is Anne Corrigan, an experienced business and mortgage lender, are making great progress. The Small Business Lending Policy is drafting and being approved by the Boards of Directors, and the small Business Lending Procedure document is being finalised.

A Business Lending system is also currently being designed to facilitate loan applications, including a letter of offer, to support the Small Business Lending Framework.

Business training to nominated officials is ongoing.

As part of this Project, CUDA reached out to the Strategic Banking Corporation of Ireland [SBCI] to discuss becoming a future Partner on SBCI schemes for SME’s and availing of their 80% Guarantee.  Our engagement has been very positive, with the SBCI being supportive, acknowledging our standardised approach with our Policy, Pricing and Underwriting within the participating Credit Unions.

We have submitted our Application for an expression of interest in future schemes and we have a couple of options that may be a good fit:

Option1:

  • Credit Guarantee Scheme which will be going through Legislation shortly as the new government is in place, with an expected live date in August.  These loans are up to a maximum term of 6 years, the scheme will offer a max amount of €1m, while our threshold in credit unions will be capped at €300k
  • The interest rate will be a discount off our current rates of interest, to pass on the benefit of the 80% guarantee to the SME. 
  • There are 2 risk mechanisms, i] uncapped guarantee [as with this scheme] and ii] 50% cap on portfolio, to be determined.
  • Credit Unions current underwriting & risk appetite to continue to apply.

Our 2nd option may be a bespoke scheme designed specifically for Credit Unions to deploy.

If you would like to express an interest in utilising the Small Business Lending Framework on its completion please contact anne.corrigan@cuda.ie who will be delighted to brief you further

Journey to the Model Credit Union Series – The Digital Journey

By | Owner Members, Strategic Development

Introduction:

Cathal Tyther started each event by stating the case for why credit unions need to embrace digital. Gartner report that 33% of financial services firms listed digital transformation as their top priority in 2019 , he also stated credit unions combining digital solutions are achieving double digit loan growth with modest investment.

Cathal then briefly recapped The Solutions Centre journey from 2017 to present and finished the introduction with an overview of the how combined digital solutions including marketing, enablers (Plug in), front end (Landing pages) and HIVE are used to maximise lending results for credit unions.

Digital Marketing Solutions

Michael Fortune spoke about how the Digital Marketing programme is designed to augment the credit unions existing marketing activities to help grow lending. How they use machine learning (AI) to target the right people at the right time and make the most of allocated budgets. Campaigns target larger loan principles over longer durations with a focus on home improvement and cars loans. Part of the brief is to expand membership to new younger borrowing members using digital channels.

Michael finished his presentation by demonstrating the affordability calculator and submitted a lead into HIVE which Michael Cox used later on in his HIVE demo to walk through the process flow for an inbound loan query.

FinTech Enablers

Thomas Brunkard walked through Solution Centres FinTech Enablers. These enablers have been developed over the past three years as solutions to unique problems facing credit unions when trying to be competitive in the digital space. Two of the biggest challenges being membership and the common bond.

FinTech Enablers include:

Percolate (Common Bond Validation)

Online Loan Application

Secure Document Upload

Online Member Onboarding

ID PAL AML verification

Thomas summed up this section with HIVE + Enablers = Better quality lead with better lending outcomes.

HIVE DEMO

Michael Cox from Intuity Technologies then took us through Hive. He covered taking Michael Fortune’s earlier loan enquiry from a lead to an opportunity within the HIVE platform, showcasing the process flows and staff time saving features. He then showed detailed reporting dashboards and HIVE’s big data and attributions modelling capabilities.

Attribution Modelling from HIVE

Thomas Brunkard then returned to make the case for real data lead marketing and the necessity of HIVE as the customer data platform. He provided a case study from a HIVE credit unions showing 2% growth comparing May 2019- May 2020 on digital channels despite the COVID pandemic.

Testimonial

In the third session, Gerry McConville, CEO Capital Credit Union, joined the event and shared his credit union’s experience. He explained how his team had worked with Solution Centre to implement the new member on-boarding process, and how they’ve integrated it with HIVE, and have processed 215 applications for membership over the previous few weeks.  Gerry summed it up perfectly stating that “HIVE is an integral part of our operation now, it’s not a nice to have, it’s a must have.

HIVE Structure and Summary

Cathal concluded by outlining HIVE’s structure and the cost savings by utilising shared services compared to alternative suppliers. He highlighted that the Solution Centre and CUDA facilitate collaboration and replicate best practice for all users. And all developments and enhancements for HIVE are led by the User Group.

Q & A

Range of questions were handled, including ongoing work to enable the automated flow of data from the banking systems to Hive [currently being completed by credit union on a daily batch run], and then the flow of data back to the banking system which will eliminate the small amount of manual data entry.

Follow Up

By way of follow up, the slide deck was circulated to attendees, this gives great insight to the platform and some of HIVE’s key features.

If you would like to receive an invite to one of our Hive webinars please let us know by emailing  info@solutioncentre.ie and we will include you on the invitation list

CUDA has been invited to participate in conference call with Minister for Finance & President of Eurogroup & Minister of State

By | Owner Members, Representation

CUDA has been invited to participate in a conference call next week with Minister for Finance & President of Eurogroup, Paschal Donohoe TD and Minister of State at the Department of Finance with responsibility for financial services, credit unions and insurance.

Among the items that will be discussed will be commitments to credit unions included in the published Programme for Government

  • Credit Unions and Community-based Financial Services
  • Review the policy framework within which Credit Unions operate
  • Enable and support the Credit Union movement to grow.
  • Support Credit Unions in the expansion of services, to encourage community development.

The Contribution of the Built Environment to Climate Action
Work with the Strategic Banking Corporation of Ireland to develop funding options to deliver retrofitting with suitable retail partners, such as An Post and the Credit Unions.

National Economic Plan – Business Financing
Enable the Credit Union movement to grow as a key provider of community banking in the country.

We welcome the above ‘commitments’ from the incoming coalition Government to the credit union sector. In this context we also welcome this opportunity to discuss key areas of the CUDA strategic plan with the Ministers, including advocate for a greater role in social, co-operative and affordable housing lending, greater capacity in mortgage and business lending, secure multi-year budget for ProEnergy loan projects and concerns relating to levies imposed on credit unions.

Credit unions have been a credit to their respective communities in how they have reacted to the Covid-19 crisis ensuring that members continue to receive essential services.  CUDA will continue to support your credit union in every way it can and will keep you updated you on the implementation of Programme for Government over the coming months.

Appointment of Minister of State at Department of Finance

CUDA welcomed the appointment of Jack Chambers TD as Minister of State at the Department of Finance with responsibility for Financial Services, Credit Unions and Insurance. This represents a significant step as it’s the first time that any Minister will have specific responsibility for the development of credit unions. We have written to Minister Chambers congratulating him and setting out how credit unions can support him in achieving aspects of the Programme for Government and contribute to rebuilding the economy, both at local and national level.

Journey to the Model Credit Union Digital Webinar

By | Events, News

The Solution Centre hosts two Webinars showcasing Digital solutions to improve member engagement – don’t miss the next one on 30th June at 3pm read more here

The Solution Centre is pleased to invite you to a webinar that will focus on the digital shared services and platforms we have developed and how they can help your credit union grow lending, reduce costs and better engage with Members. You will also see how they are being used with great success by some of your fellow credit unions.

The webinar will take place on Tuesday 30th June from 3 pm to 4 pm. If you would like to attend please complete the short registration form below. Registration is open to everyone so please do feel free to share this link with any colleagues who may be interested.

Registration:  Here

The webinar will cover;

Hive Platform – a bespoke Member engagement platform built collaboratively by a group of credit unions to manage digital marketing and Member communication more effectively. To date it has helped originate €120 million in lending while reducing IT costs.
Digital Marketing Shared Services – cost effective shared services available to improve the performance of digital marketing.
Digital Processes – How to improve Member experience with online loan application and member onboarding processes that integrate seamlessly from digital marketing to the Hive platform.
FinTech Enablers – The FinTech plug-ins that integrate throughout the Member’s digital journey to give them an exceptional online experience that makes it really easy for them to do business with your credit union, while improving credit union performance.

We do hope you can make the webinar, but if you are not available please do contact us at info@solutioncentre.ie to discuss digital solutions at any time.