80 credit unions face collapse
Mounting losses at credit unions have put 80 in danger of closure, a new report has warned.
While CUNA Mutual, which insures 65 Irish credit unions with up to €3bn worth of assets, believes they can be saved if radical changes are made, other financial analysts believe a bailout is necessary.
UCD banking professor Ray Kinsella told RTE’s News at One he anticipated that credit unions would need public assistance as a result of recent stress tests, the results of which will be published soon.
“This assistance is not a bailout in an accepted sense of the world – it’s a bail-in by society,” he said.
But the report by CUNA has predicted that despite the sector’s financial problems, credit unions could sustainably grow by 7.5pc per year.
Irish credit unions have assets of more than €14bn and annual income of €140m.
Credit unions could help fill the gap left by the banking crisis, but will first have to solve their own problems, the report added.