IRISH CREDIT UNIONS VOICES FOR THE FUTURE

What now for credit unions? Monty, regarding your...

2011-11-21T23:58:42.525Z

What now for credit unions?

Monty, regarding your most recent post in your blog which is "to encourage debate on crucial issues and challenges facing Irish Credit Unions", it is not possible to post a reply. Perhaps this is an oversight, and if so could you please allow replies. If not please do not pretend that your are trying to encourage debate. At least be honest and describe your site as what it is. Your opinion on the Challenges facing Credit Unions.

As a CU professional I was horrified at these rema...

2008-10-10T12:21:00.000+01:00

As a CU professional I was horrified at these remarks from our president. In another speech last weekend Mr Adair waxed lyrical on the banking crisis and on how well credit union amateurs are doing with members funds. It is quite obvious to those of us who work in the industry that the world is not as simple as Mr Adair would lead us to believe. Lets wait and see what transpires at some credit union AGM's this year before we join in our presidents gleeful dance at the demise of our colleagues in the banking fraternity. When all around you etc etc..............

Innocents abroad. Without realising it the ILCU pr...

2008-09-24T00:47:00.000+01:00

Innocents abroad. Without realising it the ILCU press release is a manifesto for increased moral hazard risk.

Credit union non-compliance, mismanagement, bad governance, risky investments, bad lending, solvency and liquidity problems etc doesn't matter because savers fund are guaranteed by the state.

It is reminiscent US S&L's who leveraged off the state guarantee.

What an illconceived unwise and frightfully daft communication.

Sam

Thee is a big difference between a State guarantee...

2008-09-22T13:00:00.000+01:00

Thee is a big difference between a State guarantee and a 'backstop'. Credit Unions should participate in the DGS on the same basis as banks. They would only need to contribute 0.2% of €16bn savings or €30m from the existing SPS fund. There is a single Financial Regulator, a single Financial Services Ombudsman, why not a single Deposit Guarantee Scheme. It would also put an end to the ILCU's pretence of self-regulation in the name of savings protection. Forget the League's SPS, invite direct contributions from Credit Unions to the DGS. They will opt for the €100,000 cover.

Credit Unions members now have their savings up to...

2008-09-20T18:27:00.000+01:00

Credit Unions members now have their savings up to €100,000guaranteed by the Government, the same as the banks.

You forgot to mention the the newly appointed CEO ...

2008-09-09T21:17:00.000+01:00

You forgot to mention the the newly appointed CEO of the ILCU chaired a presentation on the future of mobile banking in the Philippines. Maybe he would like to share his thoughts on the future of Irish credit unions, mobile or otherwise.

Great site with good commentary. Two months since...

2008-08-21T14:02:00.000+01:00

Great site with good commentary. Two months since a contribution. Has the voice ceased ?

Great site and commentary but contributions need t...

2008-08-08T00:16:00.000+01:00

Great site and commentary but contributions need to be more frequent. Any chance this could become a discussion board?

NO COMMENT ON THE NEW PROPOSALS , VERY INTERESTED ...

2008-07-24T11:39:00.000+01:00

NO COMMENT ON THE NEW PROPOSALS , VERY INTERESTED TO HEAR YOUR VIEWS ON THE AMENDED OFFER

Interesting observation. I wasn't clear on where E...

2008-07-18T22:58:00.000+01:00

Interesting observation. I wasn't clear on where Enfield stood until the recent media report of a settlement -
Whatever about the outcome or reasons why it occurred in the way it has the Enfield saga is but a symptom of a deeper underlying and fundamental problem that remains to be taclked.

The I.L.C.U. is a damaged entity. It galloped thro...

2008-07-18T22:39:00.000+01:00

The I.L.C.U. is a damaged entity. It galloped through a thoroughly unsuitable deal with Davy before flying off on it's annual jolly, this year in Hong Kong. While there, little Enfield Credit Union did the best it could in very unfavourable circumstances, and delivered a far superior deal for all credit unions than the ILCU did. Davy, despite being warned by ILCU not to go outside the deal agreed between ILCU and Davy, went ahead and cut a deal with Enfield. Enfield extended the deal to the other 148 Credit Unions. Enfield provided the real leadership to Irish Credit, NOT, the ILCU worldtravellers!!

CUDA has advertised for a new CEO in the Irish Tim...

2008-07-08T23:54:00.000+01:00

CUDA has advertised for a new CEO in the Irish Times. They say they have 300,000 members? By my reckoning the number is far lower at about 170,000 or so. Their website is quite an odd read as it hasn't been updated since 2006. Leaves you wonder what exactly CUDA's been up to since early last year? I recall when it started that many felt it would not last as its members had little in common. Of course the original anti-ISIS cabale remain but this is to be expected.

The davy deal is now on the table with € 35m on of...

2008-06-12T19:29:00.000+01:00

The davy deal is now on the table with € 35m on offer to credit unions to redeem the losses they have suffered to date on these perpetual bonds. I am not aware of any other financial institution that has come forward with such an offer to its customers and guess what the credit unions dont want the deal because they sell the option to davy of possibly getting their money back and more and they are against this. Well then lads keep the bonds and take the risk that all other investors have to take, did you guys not know what you were buying?? Explain this to your members.

There was more time spent debating the quality of ...

2008-05-21T17:49:00.000+01:00

There was more time spent debating the quality of hotel accomadation and food than on matters of import - a lot of time was given over to letter writing suggestions from the floor in response to presidential exhortations to resist new regulations. Still the masses were lulled back into complacency by the dull monotony of familiar voices and the annual mind numbing passing of motions.

The Davy - ILCU deal has still not been published,...

2008-05-20T23:51:00.000+01:00

The Davy - ILCU deal has still not been published, some 8 days since it first saw the light of day. That it was witheld from credit unions at the April ILCU conference, when it's quantum had already been included in the Davy 2007 Accounts is disappointing but not surprising. The details of the proposed deal is still a mystery. Credit Unions will go for it, however, as the vast majority will seek a short-term win for this year, and ignore the fact that they will suffer real losses on these investments in the 9 or so succeeding years.

Credit Union investment losses are currently being...

2008-04-23T23:53:00.000+01:00

Credit Union investment losses are currently being financed from either operating income or reserves but not from member’s savings/money. In the same way loans losses are financed through provisions and write offs. Thus to say that member’s money is being lost may be somewhat incorrect.

Of course member’s value is being impaired as investment losses tend to reduce a dividend/interest rebate, reduce investment in better products/services including lowering loan rates and impair reserve creation.

The dearth of investment competence exposed recent events should cause all credit union boards to take stock of their duty of care to ensure safety and soundness. This includes ensuring the credit union is a competent financial co-operative with the skills and abilities to undertake the business of a credit union which includes prudential investments that do not expose members savings to undue risks.

"So far members money has not been lost", Mount St...

2008-04-22T23:46:00.000+01:00

"So far members money has not been lost", Mount Street says. Rubbish! Some €46 million has already been lost on perpetual bands. Nearly as much more has been lost in ill-fated ISTC bonds. Credit Unions are losing an average of €35,000 principal, not to mention interest foregone, in every million they have invested in the ILCU's Central Treasury Fund. Credit Union members' money is being lost daily by a combination of sheer incompetence and ignorance.

The Regulator has no role in the oversight or regu...

2008-04-21T00:18:00.000+01:00

The Regulator has no role in the oversight or regulation of the ILCU SPS. The finger points to the Department of Finance whose officials are intent on a solution within the context of curent legislation - codespeak for negotiate the approval and regulate the ILCU SPS. To be fair to the Regulator it did produce a draft heads of a bill for a scheme not unlike the O'Toole Bill in early 2006 following ILCU proscratination and obfuscation. The ILCU countered by appealing directly to the Minister -

So far members money has not been lost - what has happened is credit unions (regulated financial firms) have engaged in highly imprudent income maximisation investment strategy, with the backing of the ILCU - leading to losses in highly innappropriate products- none of which yet has resulted in substantial danage to solvency. Nonetheless savers funds have been exposed to undue risks - The Regulator has been rather quite of late - one wonders what the true scale of undue risks are.

It is about time that the Financial Regulator got ...

2008-04-19T20:54:00.000+01:00

It is about time that the Financial Regulator got the finger out - credit union members moneys are being lost in massive investment losses, through the Perpetual Bonds directly, through the Central Treasury Fund and through the so called Savings Protection Scheme Fund. The Regulator stands off, waving an accusing finger, and ultimately doing nothing.

The ILCU has no investment management skills. The Regulator allows credit unions to plough members money into an un-regulated so-called "protection fund". I blame the Financial Regulator for playing the political game of turning the blind eye towards the ILCU fund. The so-called "accounts" of this significant fund are far from transparent.

Regulator - get off the fence.

Why indeed is the Supervisers Forum funded by the ...

2008-04-18T00:31:00.000+01:00

Why indeed is the Supervisers Forum funded by the ILCU. It should be possible for this important group to self-fund through credit union subscription. Many question the role of supervisers and suggest it should evolve into well designed internal audit function.

a seabhac. Your point is well made but is it not the case that leadership must start at credit union board level and this is precisely where it is lacking the most ?
A national common bond would require a federalist type structure which is beyond the capacity of the vast majority of credit unionists to comprehend.They have a proven, inbred inability to collaborate beyond the common bond. Yet if just a small number were to evolve into a large coalition then it might be possible to modernise. The ILCU system can't lead and CUDA is a spent penny - any signs of new thinking and action emerging?

Why is the National Supervisors Forum accepting fu...

2008-04-17T11:54:00.000+01:00

Why is the National Supervisors Forum accepting funding from the ILCU?

You have compromised your independence.

The Investment crisis in credit unions is a mere s...

2008-04-17T11:52:00.000+01:00

The Investment crisis in credit unions is a mere symptom of an underlying crisis that few recognise and an even lesser number acknowledge. Excess savings grew up in credit unions through a combination of factors:- credit union leaderships, voluntary and professional alike, were unable to react to critical lending market changes; the over-simplistic, one-size-fits-all approach of analysts, and their attendant ratios, including the unsophisticated measurement of arrears, meant that the investment of savings, as opposed to diversification into lower rate loan products, became very attractive;the essentially local and parochial nature of credit union leaderships meant that they fixated upon their own little patch, and depended over-much on the representative associations for advice and guidance - areas that the ILCU in particular has neither expertise nor business acumen in;local boards totally neglected their duty of care to members money, and plunged headlong into investments they know little or nothing about. That 148 Credit unions invested in perpetual bonds, and clearly didn't read the small print where it existed, is a testimony to how unfit these directors, supervisors and managers are to their positions. That an even greater number of nearly 400 credit unions in the Republic invested in the ILCU led CTMF, WHICH CLEARLY POINTED OUT THE RISK OF LOSS, is an even greater indictment of the Boards and their managements. And that they continue to risk their members' money by an over-concentration of resources in this fund shows how impaired the Irish Credit Union system is.

New forms of collaboration leading to innovation and creativity will only take place if two or three or four credit unions are willing to act on their convictions, concentrate on the business of serving members, forget the family feuds and the irrelevancy that is too often seen at ILCU and Chapter conferences, and get on with the business of delivering the service levels that people need. To do this, we must stop thinking as locals only, and believing that a national leadership will magically show the way.... Who's on for a National Common Bond with local offices?

A Seabhac

Here is an excerpt from the National Supervisers F...

2008-04-15T00:21:00.000+01:00

Here is an excerpt from the National Supervisers Forum AGM 2006:

"Be advised……the Dominant Person is alive and well and still active in many credit unions. At our annual conference in Bundoran last year, the Registrar of Credit Unions, Mr. Brendan Logue, highlighted this issue in his address to the meeting. In my opinion, if the credit union movement as a whole is to make this kind of progress and advancement which will be necessary for it to survive and flourish in the long term, then fundamental changes have to be made in the manner in which Boards of Directors and Supervisory Committees are elected.

There is ample evidence again this year that documentation and information concerning this AGM were withheld from or not passed on to several supervisory committees. This practice is not acceptable and must stop. Supervisors must not be denied their legal right to access all credit union documents and information systems."

Much as I hate to say it - you are right. When I t...

2008-04-13T23:42:00.000+01:00

Much as I hate to say it - you are right. When I think of the Limrerick AGM and all the people who will be there paying for their meals using bank credit and laser cards,chatting about their foreign holiday homes financed by bank mortgages and then doing sweet nothing about providing better services to their members - well it just stinks of a happy clappy lot who are more interested in as you say looking good than doing good. When its all over most of them will be booking their tickets for their next jolly to Hong Kong, all paid for by their credit union.

Mary

Thanks for the link. I've only seen this blog this...

2008-04-07T20:06:00.000+01:00

Thanks for the link. I've only seen this blog this evening. It's certainly challenging ! Whoever Monty is they have hit the nail on the head. Well done and keep it up.

Martin