Regulator is right to set high bar for credit unions
For many of us the credit union is a friendly, efficient and understanding lender, but as yesterday's Central Bank report into the sector reveals, it was not immune from lax lending practices, although nothing on the scale of the rest of the financial sector. However, with some notable exceptions, the credit unions have continued to lend and indeed are the only financial institution where the doors remained open to ordinary borrowers over the last number of years.
Now a forensic examination by the Central Bank of more than 200 credit unions has concluded that there are concerns "about the fundamental nature of weaknesses" in governance, lending, operations and risk management in the sector.
However, the Central Bank has emphasised that, while one in four credit unions are on a "watch list", none of the hundred of these local lenders have problems on anything like the scale of Newbridge Credit Union, which had to be rescued by the State and is now run by the state-owned bank Permanent TSB.