Mergers a good idea -- but only for other credit unions
One of the most likely results of the review of credit unions are measures to facilitate the merger of small credit unions to create larger organisations that can provide more services to their members.
While most officials and managers expect major consolidation, they seem less keen to see their own credit union disappear into one of these new super credit unions.
Last week, CUNA Mutual Europe, the American-owned company that provides insurance services to credit unions, including many Irish credit unions, organised a conference in Dublin on the future of the credit union movement. One of the highlights of the conference was the publication of a survey on the views of credit union directors and managers.
Officers from 47 credit unions representing 45pc of the gross assets of the credit union movement participated in the survey.
As member-owned organisations that traditionally relied heavily on unpaid volunteers, the balance of power within most trade unions has historically been in favour of their boards rather than the managers.
As credit unions get larger and employ more full-time staff this is likely to change. "The managers of the larger credit unions felt that the balance of authority was not right," said CUNA Mutual chief Peter Walsh.
Expect to hear more of this issue as credit unions become more sophisticated and professional. The old amateur ethos will almost certainly be one of the casualties of the creation of bigger credit unions.
The survey also revealed widespread dissatisfaction among credit union officers and executives with the leadership of the credit union sector, with only one in 10 of the respondents being happy with the current leadership and a mere 5pc believing that this leadership was appropriate for the future.
Is this an indication that the apparent dissatisfaction expressed by many of the managers of the larger credit unions at their boards is reciprocated by their directors?
When asked about the need for regulatory reform, most of the respondents were in favour, with nine out of 10 expressing the view that regulatory reform was not a bad thing.
It was a somewhat different story when their views were canvassed on specific proposals, with one in three opposing the Financial Regulator's current proposals for credit union regulation. A similar contradiction appeared when the respondents were asked for their view on the need for credit union consolidation.
Once again, no fewer than nine out of every 10 of the respondents agreed that there would be a large amount of consolidation in the future, but when asked if their credit union would still be around in 10 years' time, nine out of 10 also answered in the affirmative.
Mergers and consolidation are, it seems, a good idea for someone else's credit union.