Monday 20 November 2017

Niamh Horan: 'We were victims of our own success': CU board member

The plush penthouse of Newbridge Credit Union seems a world away from its community roots, says Niamh Horan

Niamh Horan

Niamh Horan

The views stretch as far as the Hill of Allen to the front, and to the Wicklow hills from behind.

Plush black leather furniture and blue carpeted flooring finish off the executive look. "The best of the best", is how one of the lucky few to have seen the inside describe it. This is Newbridge Credit Union's luxury "VIP suite", where, at the height of the boom, the big customers were invited and loans were signed off.

Looking up at the penthouse floor from the public concourse is futile – blacked-out windows shield it from the local customers below.

Down here, it's all about the community.

Black-and-white pictures of Newbridge from times gone by adorn the walls: the local parish church, shops on the main street before the big developments spread, give that much-needed neighbourhood feel as customers queue up with their deposit books.

But the two levels are worlds apart.

"It was once described as the finest credit union in the country, soon it will be the finest dole office in the country," observed one local, as word of future plans for the building trickle through the town.

After a €54m bailout and news that the credit union had granted one loan of €3.2m and 26 loans over €550,000, people are asking: how could this have happened?

The board of directors has been hammered on the local airwaves and in the press. They all live locally in modest houses and some invited the Sunday Independent inside their homes on the assurance of anonymity.

"It's been the worst week of my life," said one craning over the radio to hear the latest rant. "I dedicated my life to working for the credit union. Everything. It's all gone."

Speaking from the kitchen where they have been fending off calls from the media, this is a board member is who was responsible for putting pen to paper on some of the biggest loans.

Why sign off?

"We were victims of our own success," the board member tells me, "in 10 years, the number of members doubled. The savings grew and grew. There were plenty of people who had over €1m in savings. And more and more people were coming to us. So what were we to do? We had all this money flooding in, the dividends were better than anywhere else. We had two choices: invest it or lend it out to people and get far more return off it? So we lent it.

"We didn't hide anything, everything was above board. Every quarter the Central Bank was sent the top 10 savings and top 10 loans. Everyone knew what was going on."

Did anyone shout stop?

"At some of the board meetings, yes, it would be fair to say that once or twice someone would say 'well that's getting pretty big' (when loan requests came in). But then we had the guarantees from borrowers; and they were continuing to pay back their loans. They had proven themselves to us."

For years, the credit union had a limit on borrowings – an individual could only get access to the equivalent of three times their savings. "But all that changed," says another board member. "There wasn't a set mark where it changed in the rule book, but people's ability to pay back was expanding all the time and so we took that into account. It's easy to point fingers at us in hindsight."

Speaking about the building itself, he explains: "We paid every cent up front for the building as it was being built. And the only reason we bought the extension was because we were afraid a local builder was going to swoop in and buy the site. He had built everything around us. We were only thinking of the future. People forget that we did all this for nothing. We were all volunteers."

So why dedicate so many years of your life to something, if you weren't getting paid for it?

His face screws up, looking like the answer should be obvious: "We did it because we loved it. Because it was giving something back to the town too."

Last week the only thing locals wanted to know was the mystery man behind the €3.2m loan.

Names of big local builders are scattered around like feathers. They gather in circles after Mass exchanging the latest information.

Sitting in his living room, a former board member who retired before the boom years, has tears in his eyes: "I remember the original founding member Thomas Fogarty used to cycle in two miles every Friday night to give tea and biscuits to everyone who was staying late to work around the clock. For years the credit union was for the little people. For the everyday.

"I remember the manager going in late one night to sign off on a loan for a widow who needed to bury her husband. She needed the money before the weekend. That was the credit union at its best," he says proudly. "Now look at what has happened. The banks were there to give loans to the big guys. These big borrowers, they should never have put their hands in the pockets of their neighbours and that's what happened. Thomas Fogarty would be turning in his grave."

Sunday Independent

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