League of Credit Unions seeks voluntary redundancies
THE Irish League of Credit Unions is seeking up to 12 voluntary redundancies as the organisation grapples with a fall in income, the Irish Independent has learned.
The league employs 80 people and is the representative body for more than 500 credit unions on both sides of the border. Chief executive of the body Kieron Brennan said the aim was to cut costs by 14pc.
Falls in investment income and a drop-off in profits from the league's insurance operation had impacted on the organisation, he said.
Most of the funding for the league comes from affiliation fees, which are determined by the size of the credit union and the number of adult members it has.
"The Irish League of Credit Unions is also conscious that credit unions are determined to operate on as cost-effective a basis as possible," Mr Brennan said. He stressed that the league was anxious to play its part and has for some time been trying to secure increased efficiencies and cost savings.
"We are currently engaged in a process with all league staff to work towards a voluntary redundancy package for those who may wish to avail of same. This process will continue in the coming weeks," he added.
Half of the staff in the league are engaged in monitoring the performance of credit unions and in selling business services, such as insurance, to credit unions, with the other half involved in representative and other activities.
On Tuesday, Finance Minister Brian Lenihan said credit union members were to be allowed to take out longer term loans and reschedule existing loans under new rules.
Mr Lenihan said he was introducing changes to the Central Bank Reform Bill to allow members experiencing difficulties to continue making smaller loan repayments.
At the moment, credit unions are restricted from having more than 20pc of their loan portfolio outstanding for more than five years and only 10pc for more than a decade.
Under the new measures, these limits will be increased to 30pc for loans over five years.
However, credit unions will have to apply for sanction from the Registrar of Credit Unions to avail of these new limits to ensure they have the necessary controls and safeguards in place and satisfy financial criteria over arrears, reserves and liquidity. Mr Lenihan commented: "Many credit union members are experiencing difficulty in meeting loan repayments due to unfavourable changes in their financial circumstances in the current economic environment.
"Increasing the lending limit for credit unions and formalising arrangements in the area of rescheduling of loans will facilitate credit unions in their wish to ease the position of these members."