THE announcement that for the first time in our history, a bank has taken over a credit union, was a sad day for the Irish credit union movement – which has delivered extraordinary service to its membership for more than 50 years.
The news is even more disconcerting when one considers that in the last five years the Irish banks, which cost the State €64bn, continue to remain moribund. There has been no significant lending and their mortgage arrears problem continues to escalate. In this environment, credit unions, while not shielded from the general economic difficulties, remain a coherent social and economic force in society. It should be remembered that Irish banks tripled in size (€201bn assets to €621bn assets) between the boom years of 2003 and 2008, borrowing heavily to fund this exceptional and unhindered growth.
In contrast credit unions grew at much more modest rates, growing by 38pc over the same period 2003-2008 (peaking at €13bn assets), and were self-financed throughout.
Credit union membership continues to increase, especially over the period of entrenchment in the economy. The increase in membership may also be as a result of the disenchantment Irish people have with the banks.
The crisis and the way in which the banks have been dealing with their customers have had a huge impact on the reputation of the banks.
In addition, banks seem to have withdrawn from the market for personal loans, particularly for small personal loans for things like education and communions etc.
Another important statistic is that savings in credit unions are up, and have increased by 0.9pc for the nine months to June 2013 to €10.5bn.
This is remarkable given the reduced dividends paid by credit unions in recent years.
The announcement last week regarding the exit of international banks from the Irish financial services sector means that there is now more than ever, greater scope for Ireland's credit unions to offer a vital link between the Irish public and accessible, community-based financial services.
Therefore it is hugely important that the Government, and by extension the Central Bank, do everything they can to ensure that the credit union movement is safe-guarded and protected.
The circumstances of the Newbridge Credit Union takeover will be revealed in the fullness of time. In the interim, it is vital that we recognise and respect the social and economic role that credit unions continue to play at a difficult juncture in our history.
Newbridge Credit Union is an exception and not a rule. However, credit unions must move forward with confidence.
It is important that we continue to be there for those in our society who need a helping hand, by offering small affordable loans to our credit worthy members and a secure environment for our member's savings.
Kieron Brennan is CEO of the Irish League of Credit Unions