The sector provides a vital counter to banks - but league needs an overhaul
Published 22/04/2015 | 02:30
Just when credit unions are getting their act together, along comes another scandal to scare the wits out of the 2.9 million people who are members.
The news lately from the sector has been good. Losses have been reduced, many credit unions are back paying a dividend and most are meeting financial requirements set by the Central Bank.
Mergers are happening at a fast pace in the sector, as smaller units seek the safety of being in bigger entities. And large numbers of the State's 370 credit unions are offering electronic payments as part of member accounts, with many set to roll out debit/ATM cards to their members.
Credit unions are also scoping out the possibility of entering the mortgage market, something that is badly needed in a country where mainstream banks are fleecing their variable-rate customers.
But the latest revelations will take much of the gloss off recent positive developments.
A report into the operation of the secretive rescue fund operated by the League of Credit Unions lays out a litany of poor management, lax governance and rule breaking.
The Savings Protection Fund (SPS), which has given out €85m since it was set up 26 years ago, needs to be radically overhauled.
An internal report into its operation, carried out by accountancy specialists Mazars, spells out 13 detailed recommendations on how the operation of the SPS can be improved.
But there is more than that needed. The league itself needs a huge shake-up. It is no longer fit for purpose in a modern economy. It is full of exotically named committees, with bizarre acronyms used to describe each one.
The openness and accountability of the league has been brought into question by the issues raised in the Mazars report.
Today's revelations about the operation of the SPS are likely to dominate proceedings at the league's AGM in Kerry this weekend.
The league needs to adapt quickly or it will be sundered by rows. It is important that this happens because we desperately need a mutually-owned, volunteer-led sector like the credit union movement as a counter to the banks.