credit union - 'no' monthly lending limits

the watchman

We heard this week that Credit Unions were having difficulty handing out loans because in some branches their 'monthly lending limit' was being reached within two weeks or so and they couldn't lend anymore!

When I heard this I thought to myself that as a general rule nobody can be refused a loan if the amount they are asking for is equal to or less than the amount of their own existing savings. With this in mind I contacted my branch for clarification. Here's what I was told by the manager:

"May I assure you that ****** credit union. does not have a lending limit on the amount of loans we can issue on a monthly basis."


I find this statement a little odd in that surely at least, the Union could not in theory lend out loans which totalled more than all the deposits at the branch!

And if this statement is true then what was all that in the media about monthly lending limits being reached.
?

Darragho

Hi Op,

to be honest with you, I went to the Cu about 3 months ago am in fulltime employment and have a good credit history with them as always paid my loans on time over the years just went for a top up of loan to clear a credit card balance and they refused me point blank telling me they were prudent and could not take the risk.

to say I am disgusted with them is an understatement, they told me i could apply on a piecemeal basis of say eg 500 now and another 500 in few months I would not lessen myself to be honest as I was treated like a piece of dirt the way I was spoken to.

My brother was also refused last month for a loan of 800 euro for his car insurance as he always pay yearly and they told him pay instead by the month through the insurance company so CREDIT UNIONS are now like the banks and not lending.

wmpdd3

Have to agree, I always found the Credit Union great. Couldn't fault them, I was always treated so much better than the bank.

But the last time I went to them, they basically said you can apply but you havent a hope. They are still as nice as they were but it seems the're hands are tied.

I also have a 12 year record, without one missed payment, various loans paid in full etc.

The problem is, when my loan is paid off, there's no way I'm going to leave my shares there, as they aren't paying a dividend either.

So what exactly will the're business be?

Pablo Sanchez

Good Question WMPDD3, unfortunatly the registrar of credit unions has clipped the wings of about 70% of the CU's by imposing monthly lending limits and limits as to how much they can lend to any individual.

It barmy stuff, most CU's have lent less than 50% of what they hold in savings, ironically the individual CU's are desperate to lend, after all how else can they make money.....and pay out a dividend in future!

the watchman

Pablo Sanchez wrote: »

Good Question WMPDD3, unfortunatly the registrar of credit unions has clipped the wings of about 70% of the CU's by imposing monthly lending limits and limits as to how much they can lend to any individual.

It barmy stuff, most CU's have lent less than 50% of what they hold in savings, ironically the individual CU's are desperate to lend, after all how else can they make money.....and pay out a dividend in future!

Now thats interesting and explains this monthly lending limit.
Here's my concern. I would imagine that there are many who like myself have savings which which they borrow against from time to time 'safe in the knowledge that they will never be refused'.....
If this is not now the case, what is the point in having the savings there . I for one am considering taking half my savings out and depositing in a normal current account where I 'can' get access at any time.....
This seems a prudent thing to do so, what if many others think this also. We then have another bad situation where there is a run on credit union savings being withdrawn, then where will we be? no doubt one or two Unions collapsing!!!

Agedcynic

I have been a member of same credit union for 32 years. Have literrally borrowed 100s of thousands over that time. Looked for a top up of €1000 on €18,000 loan recently €50 more than one months repayments.
I was refused, reason my general debt level too high, This is true, they acknowledged I have no arrears on any debt, have an excellent history with them, have a good income and a sound asset base. None the less in their opinion I have too much debt and they must be prudent.
Asked them how they differed from a bank, said banks were lending nothing.
I got the €1000 from bank. I plan sell an asset next year, to reduce my debt.Will close credit union account. I cant see any point in remaning in movement. Hadn't planned to do this.
I know I am lucky. I have options aren't credit unions for those without options. If not aren't the obsolete