Credit unions must put house in order
The latest figures from the Irish League of Credit Unions, showing that more than a sixth of all credit union loans are at least 10 weeks in arrears, proves the problem of bad loans is much worse than the movement has been prepared to admit up to now.
As we reveal in today's paper, €936m of credit union loans were at least 10 weeks in arrears at the end of June. This represented 18pc of total credit union loans of €5.2bn, up from just 10pc of loans which were in arrears two years ago.
The rise in arrears at the credit unions is particularly worrying as for people without bank accounts these are the only alternative to moneylenders if they need a loan. The credit union movement must put aside its previous objections to tighter regulation and work closely with the Financial Regulator to put its house in order. It is only by doing so that the poorest and most vulnerable people in our society will retain access to reasonably-priced credit.