Credit union runs into glitch for electronic payments plan
League fails to raise funds by July 1 AGM deadline
Published 22/07/2010 | 05:00
PLANS by credit unions to offer electronic payment services to their members have hit a stumbling block after member unions failed to stump up money on time to fund the initiative.
The Irish League of Credit Unions (ILCU) admitted yesterday it had failed to raise €1.5m in funding from individual credit unions by the deadline set at its annual general meeting.
The ILCU has since raised the money but will now have to go back to members at a special general meeting to get approval to roll out an electronic payments system.
In April delegates to the league's AGM approved a plan for a Credit Union Service Organisation, provided the funding was raised from credit unions by July 1.
The electronic payments system will allow credit union members to send and receive payments to other credit unions and bank accounts electronically.
The system will allow credit unions to offer debit cards and electronic transfers, and has been described as the biggest single change to the movement in decades.
Currently, fewer than 10pc of credit unions have the ability to undertake electronic fund transfers and only 5pc can provide debit cards.
An ILCU spokesman said funds for the system had been late arriving: "A small number of payments were received later than the deadline stipulated in the resolution [at the AGM]."
He added that before it implemented the new electronic payments system across some 400 credit unions "the league board believes the movement should be asked whether or not to approve acceptance of these funds in order that the project may proceed".
The board of the league, which has just returned from an international conference in Las Vegas, is to seek the new approvals for the electronic payments system in the next few weeks.
ILCU chief executive Kieron Brennan described the decision at last April's AGM to approve the new system as "momentous".
He said the need to establish new payment options was required by customers.
"They are saying to us they have lost faith in other financial institutions and the level of trust they have in credit unions is at an all-time high.
"They would like to have more access to a bigger range of financial services through our credit unions," added Mr Brennan.
The credit union movement has a chequered history when it comes to electronic systems. There was a split in the movement following losses on an IT system at the end of the 1990s.
The project -- to provide a centralised computer system -- was supposed to bring the credit union movement into the 21st century, but IR£27m was lost on the system.