Large credit unions may be alternative to banks as 'third force'
SMALLER credit unions may be forced to close with others forced to merge to survive, an Oireachtas Committee was told yesterday.
Cuna Mutual, which supplies life insurance to credit unions worldwide, stated that credit unions in this country could be a viable alternative to Irish banks.
Cuna boss Paul Walsh told the Joint Committee on Economic Regulatory Affairs that regulatory changes may mean some smaller credit unions will be forced to merge, with insolvent ones forced to close.
But larger credit unions have an opportunity to become the "third force" in banking.
"Unlike banks, credit unions do not operate to maximise profit, they operate to maximise social impact and inclusion," Mr Walsh told the committee.
He added that strong customer support at local level, matched by good governance and aggressive marketing would contribute to turning the credit union movement into a real force in the Irish financial services sector.
"The credit unions have been the most important source of credit in Ireland during 2009 and handled more loans than the banks.
"Let's be very clear, the credit union has a major role to play in the recovery of the personal finance sector in Ireland," he added.
"It is different to the banking industry because it has the trust of its members, the local access to new business and a proven track record," Mr Walsh said.