Editorial

Tuesday 29 July 2014

Credit unions are noble institutions, worth saving

Published 11/11/2013|02:00

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THE Irish credit union movement is now in dangerous territory and everybody involved must tread very carefully indeed. Some three million people across the island of Ireland north and south have a real stake in its future. One of the finest movements ever set up in the modern Irish State, one which continues to promote thrift, self-reliance and community solidarity in every parish, is now at risk.

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The Central Bank last night went to the High Court to seek permission to sell one of the country's biggest credit unions in Newbridge, Co Kildare, to the state bank, Permanent TSB. The implications of that case will be analysed with great anxiety by the bulk of credit union members across the country.

Among the more disturbing aspects of cases such as this has been a lack of transparency.

Last month another large credit union, Maynooth, had to go to the High Court to successfully ensure that the hearing of a dispute between it and the Central Bank will be conducted in open court. That complex case will now be heard next January and again will be carefully watched by all other credit unions.

In dealing with the real problems affecting many credit unions we must not lose sight of the practical patriotism of people who dreamed of building a people's bank movement back as early as December 1953.

Those people worked solidly for the next two decades and built a movement which by the late 1960s was a force for good in every corner of our island.

Credit unions continue to give people access to credit on reasonable terms and cultivate thrift and skilled money management. They have successfully battled against debt, hopelessness and blood-sucking money lenders.

Today, we are already seeing the rise of legal money lenders charging impossible rates of interest and behind them lurks the even more sinister spectre of the illegal usurers.

Many credit unions, like most of our financial institutions, have been hit by the boom and bust cycle we have endured. In some cases costly errors were made. And remedial action by the Central Bank, funded by taxpayers, is required. But we must do nothing which puts the Irish credit union movement at risk. Many members will today be rightly concerned at the prospect of their local credit union being being taken over by a bank.

'LOST GENERATION' NOT JUST A PHRASE BUT A WORRYING, ECONOMIC REALITY

TODAY we learn that the term 'lost generation', as applied to Irish people in their 30s may well have an even more literal meaning. Results of an extensive Irish Independent/Today FM survey show that far too many people in this age group have effectively put their lives on hold because of fears for their economic future. Some 22pc of people in the 20 to 49 age range have put off having a child due to future financial uncertainty.

This ratio goes up when focused on people in their thirties – the age-group in which people are most likely to have children. The finding has many social consequences and is a serious commentary on our quality of life. But it also has serious long-term economic consequences. There is now every danger there may not be enough people of working age to support Ireland's economy.

The overall finding of a lack of confidence in Ireland's economic future is equally not encouraging. One in four of those in the 30-39 age bracket see themselves as being obliged to emigrate.

Despite falls in prices across many sectors over the past five years, it is notable that childcare costs – with a full-time creche place costing between €715 and €1,260 per month – still remain comparable to a 'second mortgage'. Things have not been helped by cuts to children's allowance and maternity payments.

Last week we heard eminent economist Joseph Stiglitz warn that the cost of bank bailouts and non-stop austerity risked denying prosperity to 'a lost generation'. Today we learn of even more serious potential consequences: the generation which should follow on from the one Dr Stiglitz referred to risks being lost entirely.

Irish Independent

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