end of credit unions?

123balltv

Warning over 'end of credit unions'
(UKPA) – 5 hours ago
Ireland's credit unions face being wiped out and replaced with a handful of "Tesco-type" super lenders, it has been warned.
Financial Regulator Matthew Elderfield signalled he would not go easy on the voluntary movement which he said had worryingly low cash reserves.
The banking watchdog, which is pouring through the accounts of credit unions across the country, said they have on average 40% less money set aside than they should for bad loans.
http://www.belfasttelegraph.co.uk/news/local-national/republic-of-ireland/warning-over-end-of-credit-unions-14969128.html

:mad: I'm a big fan of credit unions
loan sharks are going to have a field day, God help the poor in this rotten Country

starbelgrade

Credit Unions. Aren't they like banks for poor people?

mikemac

We complain when the Regulator doesn't enforce rules and we complain we they do

If a credit union hasn't set aside cash reserves for liquidity then it will have to be investigated and possibly liquidated.

Blame the directors being reckless and not the regulator here.

123balltv

starbelgrade wrote: »

Credit Unions. Aren't they like banks for poor people?

Yes I was told some time back that Credit Unions were formed by a nun who was fed up of the way loan sharks were treating the poor of New York.

knird evol

feelingstressed wrote: »

Blame the directors being reckless and not the regulator here.

Those reckless credit union directors giving out money for car loans likes its confetti. Poor little marys first communions coming up, a new dress is needed. Well these high flying, financial whizz kids in the credit union playing their deadly game of high stakes gambling ...their shuffling around fifty euro notes like their 50c coins. they are laughing, but the Financial Reserves aren't in the safe. its a house of cards about to burst, there will be no soft landing for this pyramid

heyjude

knird evol wrote: »

Those reckless credit union directors giving out money for car loans likes its confetti. Poor little marys first communions coming up, a new dress is needed. Well these high flying, financial whizz kids in the credit union playing their deadly game of high stakes gambling ...their shuffling around fifty euro notes like their 50c coins. they are laughing, but the Financial Reserves aren't in the safe. its a house of cards about to burst, there will be no soft landing for this pyramid

Appreciate the humour, but I think there were reports that some credit unions had been engaged in issuing property loans, which if true would suggest that rather than hundreds of small outstanding loans for purchases such as cars, some credit unions may be exposed to relatively large property based loans.

baldbear

Alot of Credit unions are in serious trouble i'd imagine. They seem to be run by amateurs who havn't the ability to run them.

Some CU seem to lend to people on the basis they know all there family well and "sure aren't they good for it!" Pure cute hoorism.

ARe all CU linked? Or are they all seperate entities? One might go bust and another will be sound?

Hunchback

is it branch specific or the institution itself that are under threat?

Hunchback

the article says "He's going to strangle a lot of robust credit unions because he's going to apply a blanket provisioning arrangement on them," .

sorry, i thought i had already read the article, but it was from a different publication.. apologies, this answers my question

jimmycrackcorm

I passed though a small town last week and the credit union caught my eye because, like many of them throughout the country, they have beautiful modern buildings. I had an uneasy thought that it doesn't make sense how what was once a simple savings and loans club run by voluntary staff could afford to pay for these fine buildings.

mr_happy

They are all separate entities not branches. You cant lodge from one to the other.

nerraw1111

baldbear wrote: »

Alot of Credit unions are in serious trouble i'd imagine. They seem to be run by amateurs who havn't the ability to run them.

Some CU seem to lend to people on the basis they know all there family well and "sure aren't they good for it!" Pure cute hoorism.

ARe all CU linked? Or are they all seperate entities? One might go bust and another will be sound?

In other words, you've no idea what you're talking about.

dubtom

baldbear wrote: »

Alot of Credit unions are in serious trouble i'd imagine. They seem to be run by amateurs who havn't the ability to run them.

Some CU seem to lend to people on the basis they know all there family well and "sure aren't they good for it!" Pure cute hoorism.

ARe all CU linked? Or are they all seperate entities? One might go bust and another will be sound?

Sure haven't they lasted this long despite their cute hoorism. I can't honestly say I've ever heard of one going out of buisness,although I could be wrong about that. Their lending criteria is based on how much the borrower has in savings not on how much some accountant says they earn on a dodgy P60, that's the main difference between them and the banks.If you don't have a saving record with the CU you don't get the loan. We couldn't say that about the banks now could we.

Social Disorder

mr_happy wrote: »

They are all separate entities not branches. You cant lodge from one to the other.

Collective pool of money though, I assume? So collective debts...

ejmaztec

Loan-sharks are still around, so some credit unions must be a bit more selective in the lending department.

leedsfan88

But CU's are covered under the bank guarantee aren't they?

for up to €100k

Johro

I was able to build my house thanks to a credit union loan, using the deeds to the land as security. For those of you that criticise the CU, I feel sorry for the people who got bank loans. Mine will be paid off in a couple of years, and the interest goes down with every payment, as it's calculated on the amount left outstanding. It was over a five year period, I got two years of monthly payments left. If for some reason I wasn't able to make the payments, I'd go in and have a chat with the local credit union manager to work out what I could afford as a monthly payment and it would be adjusted accordingly. I've had to do that a few years back on a different loan and had absolutely no problem in changing my then weekly payment. Try that with your bank. They won't be so sympathetic. They'd rather take your house, sell it for less than it's value and leave you homeless.

The_Minister

dubtom wrote: »

Sure haven't they lasted this long despite their cute hoorism. I can't honestly say I've ever heard of one going out of buisness,although I could be wrong about that. Their lending criteria is based on how much the borrower has in savings not on how much some accountant says they earn on a dodgy P60, that's the main difference between them and the banks.If you don't have a saving record with the CU you don't get the loan. We couldn't say that about the banks now could we.

Yeah you could actually.

Try getting a mortgage unless without a account in a bank.

If you go to Bank A and look for a loan, but your savings account is with Bank B, then Bank A will make you authorise Bank B to send them information to make sure you are god for it.

Banks look at income and accoiunt details.

Johro

dubtom wrote: »

If you don't have a saving record with the CU you don't get the loan. We couldn't say that about the banks now could we.

True. I took out a loan of about 500 first for a holiday, when paid off I got a few grand to buy a van, when that was paid off I got the loan for building my house. I don't see anything wrong with having to build up a bit of a credit rep. You pay your weekly/monthly payments, what you can afford, you'll get a loan.
I think it's better than having credit cards thrown at ya.

dubtom

The_Minister wrote: »

Yeah you could actually.

Try getting a mortgage unless without a account in a bank.

If you go to Bank A and look for a loan, but your savings account is with Bank B, then Bank A will make you authorise Bank B to send them information to make sure you are god for it.

Banks look at income and accoiunt details.

Of course they look at bank details, well back in the day the word to use would be browse bank details.How do you think people earning under 50K a year managed to get 300K mortgages, was it because the banks were being diligent.
No,it was because you could throw any figures at them, on any dodgy bit of paper,and they didn't bother to check if the figures added up.

kippy

Credit Unions are a pretty important financial institution in many peoples lives.
They are capped at the maximum they can lend to people and a lot are actually capped in the maximum amount of savings they can pay interest on. They've probably been more self regulating than the banks in those cases.
I've a couple of loans with the credit union, nothing too major, covered a few home improvements and a car a few years ago (payed off a while ago). Very very easy to renegotiate terms of the loan with the staff in there should you improve your circumstances etc.
I had to laugh when I read some of the comments above by posters saying they were ran by a bunch of amateurs - most of them probably still are although there is some renumeration given to some staff at this stage I believe.
How much more amateur were the bankers who got us into this mess in the first place however? I see a bit of snobery going on there.

All of the above being said, if some credit unions are operating outside of specific guidelines set out by the Irish League of Credit Unions of the regulators, then yes, something is going to have to change with the way these individual credit unions work and operate.

the_syco

Social Disorder wrote: »

Collective pool of money though, I assume? So collective debts...

No. Fail.

ejmaztec wrote: »

Loan-sharks are still around, so some credit unions must be a bit more selective in the lending department.

If you don't pay back money, the nice credit unions won't throw you out of your home in most cases to get that money back.

Would loan-sharks be as nice, I wonder?

AAAAAAAHHH

Johro wrote: »

I was able to build my house thanks to a credit union loan, using the deeds to the land as security. For those of you that criticise the CU, I feel sorry for the people who got bank loans. Mine will be paid off in a couple of years, and the interest goes down with every payment, as it's calculated on the amount left outstanding. It was over a five year period, I got two years of monthly payments left. If for some reason I wasn't able to make the payments, I'd go in and have a chat with the local credit union manager to work out what I could afford as a monthly payment and it would be adjusted accordingly. I've had to do that a few years back on a different loan and had absolutely no problem in changing my then weekly payment. Try that with your bank. They won't be so sympathetic. They'd rather take your house, sell it for less than it's value and leave you homeless.

That's complete bollocks.

ejmaztec

the_syco wrote: »

No. Fail.


If you don't pay back money, the nice credit unions won't throw you out of your home in most cases to get that money back.

Would loan-sharks be as nice, I wonder?

I think they offer a free pair of concrete boots if you can't pay the 1000% interest bearing loan.

Hande hoche!

This is all Brian O'driscoll's fault.

DublinWriter

starbelgrade wrote: »

Credit Unions. Aren't they like banks for poor people?

No, they're money lenders for smart people.

Wicklowrider

Its over 20 years since I've borrowed from my CU but nearly every penny I have is lodged there. My redundancy was lodged there 3 years ago and has remained there. I will support them as long as I can. Why? Because when I needed credit to buy a banger of a car they lent to me. When I needed money to put heating in my home they lent it to me. When I was out of work for a while they lowered my payments. I never needed a credit card because of they exist.And yes, they do operate out of a beautiful office. They bought the premises as an investment 25 years ago and it has apprecciated since. They have always operated in a transperent, professional and admirable style.
They're simply great:). If all other sectors of this country handled their affairs like my credit union we'd live in a idyllic state.

I bet the banks would love to see the end of them now though.

orourkeda

The regulator is doing his job.

However, how many credit unions have been bailed out.

I'm a huge fan of the credit union and most of what I have is with them too.

My name is URL

Every cent I save is in the CU.. the only money I leave in the bank now is to cover standing orders and direct debits. I've always had a lot of time for the CU.. even volunteer as a cashier from time to time. I'd hate to see them go under

To those saying it's run on cute hoorism.. that's bull****. There are very strict rules on who can borrow, and the amounts they can borrow. And it would be a very serious thing if lending officers were granting loans based solely on who you are

nudist

starbelgrade wrote: »

Credit Unions. Aren't they like banks for poor people?

What is a credit union? really though ive seen those places around now for a while but ive never been in one.

maxwell smart

There are lots of ways the credit unions can get their act together. Most of them are run on a voluntary basis and we all know you get what you pay for.

My local CU is one of the largest in the country and it put in a provision for bad debts of €6m in last years accounts.

The largest single loan outstanding is in excess of €1m. Now I think that is a bit of cute hoorism there. As that amount exceeds nearly every guideline for the CU movement.

I wonder if many more CU's have these size loans?

The_Minister

dubtom wrote: »

Of course they look at bank details, well back in the day the word to use would be browse bank details.How do you think people earning under 50K a year managed to get 300K mortgages, was it because the banks were being diligent.
No,it was because you could throw any figures at them, on any dodgy bit of paper,and they didn't bother to check if the figures added up.

Eh no, actually they did check into the figures - they have a whole departments to do that.

The thing is, the high price of property and the high wages meant that people were willing to commit to a larger portion of their income to repayments.
As well as that, since house prices kept rising, it wasn't as risky for the bank to lend to people - if they defaulted the bank would get all its,money.

Banks here never stopped investigating people (unlike in America).
They were just willing and able to lend people more money than previously.

celtic Liger

if credit unions had atm's, i'd never set foot in a bank again

johnnyjb

celtic Liger wrote: »

if credit unions had atm's, i'd never set foot in a bank again

I know of one in cork that has an atm outside the door and one in the city centre

Dravokivich

johnnyjb wrote: »

I know of one in cork that has an atm outside the door and one in the city centre

There's 1 in Clondalkin, but it's a BOI Atm...

Credit Unions actually give out ATM cards?

leedsfan88

celtic Liger wrote: »

if credit unions had atm's, i'd never set foot in a bank again

You can get a atm card from my CU and a know a few up the country where offering them a few years back.

I don't have one as i use my CU for all my savings

mikemac

You can buy cheaper Bus Éireann tickets in mine.
Well at least you could, I've not bought any in a few years

changes

Credit unions are great, you can pay off your loan early and not face a penalty. I paid of a BOI car loan early and had to pay all the interest so i saved nothing. I won't get another loan of a bank again.

As for tesco... i applied for a loan of them and they tortured me and tortured me for more and more info and ended up refusing me the loan after about 6 weeks anyway... never again.

bryaner

feelingstressed wrote: »

We complain when the Regulator doesn't enforce rules and we complain we they do

If a credit union hasn't set aside cash reserves for liquidity then it will have to be investigated and possibly liquidated.

Blame the directors being reckless and not the regulator here.

I cant see anyone blaming the regulator here..

celtic Liger

celtic Liger wrote: »

if credit unions had atm's, i'd never set foot in a bank again

The credit union in Ballyfermot does have an ATM.

feelingstressed wrote: »

You can buy cheaper Bus Éireann tickets in mine.
Well at least you could, I've not bought any in a few years

I know the one in Listowel once offered cheaper train fares from Tralee or Limerick, not sure if they still do.

Rockery Woman

I have a car loan with the Credit Union.

It used to be very easy to get a loan from them. I have been a member for 15 years, have paid back several loans over the years, thank God I have an immaculate credit history.

When I applied for my car loan in July, it wasn't so straightforward. Gone are the days when they approved loans there and then! I had to submit wages slips and proof of address, even though I pay direct into the credit union (deducted from my wages - straight into CU account) and have been doing this for 15 years (savings and loan repayments)

I signed a form stating they could run a credit check on me, I had to explain all my out-goings; mortgage etc.

It seems the credit unions are getting more responsible when it comes to approving loans. For the first time ever I was concerned I wouldn't be approved.

A previous loan of E10,000 euro in 2006 was approved on the day I applied for it. I paid it back 2 years early (the term was 4 years for that loan) My new loan of E14,000 - I waited 4 days for approval.

Things have changed in these recessionary times:pac:

mikemac

bryaner wrote: »

I cant see anyone blaming the regulator here..

I was reading the article in post 1, the TD from Cork

Johro

AAAAAAAHHH wrote: »

That's complete bollocks.

Tell that to the people who got their homes repossessed.

AAAAAAAHHH

Johro wrote: »

Tell that to the people who got their homes repossessed.

If you think banks won't try to work out a payment plan with people who are struggling to pay off their loans then you're talking through your arse.

robbie_998

Dravokivich wrote: »

There's 1 in Clondalkin, but it's a BOI Atm...

Credit Unions actually give out ATM cards?

oh yeah the one in the lovely shiny brand new building that only opened there about 3 months ago or something .... they moved literally across the road !

their old building is still up for sale or rent whatever !

the atm is there cos eon's ago that was a Bank of ireland until they moved.

celtic Liger

So do these cards work on any ATM machine?

Maybe I'll rephrase my original post...

If credit unions did cirrus/maestro laser cards, I definitely would never set foot in a bank again!

That and the fact the girls are way hotter in my credit union then my bank

mr_happy

The one problem I have with the CU is this.

Say you need 20K and you have 10K saved.

They give you the 20K as a loan while the 10k stays in savings.

Thats not good as you pay more on the loan of 20 % wise in interest than you get % wise in interest on the 10K.

You really only need to have borrowed 10 to add to your 10 but they craftily give you 20K

johnmcdnl

mr_happy wrote: »

The one problem I have with the CU is this.

Say you need 20K and you have 10K saved.

They give you the 20K as a loan while the 10k stays in savings.

Thats not good as you pay more on the loan of 20 % wise in interest than you get % wise in interest on the 10K.

You really only need to have borrowed 10 to add to your 10 but they craftily give you 20K

isn't that not your own fault ?? :S

Coriolanus

I love the CU. I actually didn't realise that the staff were volunteers. I presumed that they were all paid and I was quite happy with that.

I'm sure like all groups of organizations, there are some bad apples.

Rockery Woman

mr_happy wrote: »

The one problem I have with the CU is this.

Say you need 20K and you have 10K saved.

They give you the 20K as a loan while the 10k stays in savings.

Thats not good as you pay more on the loan of 20 % wise in interest than you get % wise in interest on the 10K.

You really only need to have borrowed 10 to add to your 10 but they craftily give you 20K

You can use the 10k savings to pay off the remainder of the loan once the initial 10k is paid off. The credit unions discourage this but it is allowed! If you put some money in your savings and build it up it means paying your loan will be quicker.

But it is annoying that you cant touch your savings while you have more than the saved amount outstanding in loans.

ongarboy

I've never been a member of a CU as I question their proof of identity controls. My cousin told me she went to withdraw all her money from one a few years ago before heading to Oz for a year and the clerk didn't even ask her for ID to prove her identity for the withdrawal request. My cousin was only living in the particular town for a year and apart from one visit a year earlier to lodge the money, she had never been back so it was not like the staff would have known her. Obviously she was genuine, but it implied that anyone could impersonate someone and do a runner with cash. I told my cousin she should have challenged them on their lack of security questions. That was a few years ago so maybe they have PIN number keypads now like the regular banks to validate identities.

Also, I find the idea of a union holding my money giving loans to people of dodgy credit ratings (ie turned down by mainstream banks) a little worrying so another reason why I'm put off them.