Friday 21 October 2016

Editorial: Credit union dismay over debt scheme is justified

Published 02/04/2014 | 02:30

Credit Union
Credit Union

ON the face of it, credit unions may appear somewhat unreasonable and obstructionist in frustrating attempts by the Central Bank to roll out a new scheme to help households with multiple debts. The scheme could see some heavily indebted households getting a writedown of some of their debts.

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The Irish League of Credit Unions, the largest representative for the sector, is fighting a rearguard action to protect its member unions. Some credit unions and some bodies representing the sector have been involved in the talks on establishing a new multi-debt restructuring scheme, and the main banks have signed up.

But credit unions fear they will lose out because under the terms of the scheme arrangements would be made to prioritise the paying of the mortgage. Keeping people in their homes is a key public policy, meaning secondary debts may not get repaid.

The credit unions have been accused of failing to realise that a person's first priority must be to protect their home. But that is not to say their stance does not have some merit.

Credit unions, with the exception of Newbridge, tend to be prudent lenders. They know their customers. They did not get involved in the lending frenzy to the same extent as the banks during the boom. The thanks they get is that they are now to become collateral damage in the attempts to clean up the household borrowing mess.

And the credit unions can also credibly argue that if multi-debt deals are to be done, then the new Insolvency Service is the process to use.

Banks don't like the Insolvency Service deals because the rules are heavily prescribed. It's far handier for a bank that issued the mortgage to do an informal deal with a householder, with the bank retaining control of the terms.

However, it is hard to escape the conclusion that the credit unions are set to be the eventual losers when the Central Bank finally launches the new multi-debt initiative.

The credit unions will become another in the long list of casualties of reckless lending.


People of a certain age will be quite shocked to learn that Irish students may be at a "disadvantage" because of their lack of familiarity with computers. Those of us who go about our daily lives on public transport, or see young people at home or out with friends, will have great difficulty reconciling this image with the young people we see around us, the vast majority of whom seem surgically attached to laptops, iPads and phones.

Yet Ireland's Educational Research Centre (ERC) has concluded that: "Students in Ireland may have been disadvantaged relative to students in other countries due to less familiarity with using computers, at home and at school, for school-related tasks." School-related tasks is possibly the point.

It would seem to the casual observer that Irish teenagers and students are as familiar as any of the peers with modern technology. The uses they put their skills and knowledge to is what may be in question.

The comment arose out of an international comparison of student performances in which Ireland was ranked 17th of 28 countries in 'creative problem solving'. It seems Irish students fall down badly on 'planning and execution' of problems, especially compared with young people in South Korea and Hong Kong.

This has long been a problem in Irish education and although the Department of Education is now trying to correct the deficiency, it will take some time. Irish students can probably take some consolation in that when it comes to social skills they are well ahead of the maths geniuses from the east.

In the meantime, it would probably be wise to capitalise on students' newfound love of technology so that it can be better utilised for "school-related tasks" rather than pure social intercourse.

Irish Independent

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