There are 425 credit unions registered in the Republic of Ireland currently. They vary very considerably in asset size, investment portfolio and services offered. Some offer excellent services, and are open six days a week, and have excellent websites and member interaction.
What is not being highlighted are the successful credit unions - community credit unions offering loans between 6.5 and 7.5% APR, and paying dividends of between 2.00% and 3.00%. We see no mention of credit unions undertaking significant social investment in areas such as financial literacy, combating illegal moneylending, and supporting local sports teams, schools, etc. That is too unsexy for financial journalists to write about.
Nor does anybody - credit unions included - seek to explain the very excellent "Free-to-Members" Life Savings, Loan Protection, Permanent Disability and Death Benefit Insurances that most credit unions provide for their members.
The oft-repeated mantra of "high bad debts" is an easy chorus for all who care to hum - but has anybody investigated the logic of the situation?
For a start, most credit unions operate significantly in a niche of the market that is largely unbanked. The banking sector only discovered the working class in the last decade, and indeed has been steadily withdrawing branches from rural areas in recent years. Credit Unions, in fairness, have stuck in there, providing "banking" services to the sometimes less fashionable sectors of society - the sectors the Celtic Tiger forgot.
That this sector would have a higher level of arrears, on occasions, is understandable. Financial Need does not travel in parallel with financial ability - in fact, quite the opposite at times. Be realistic, there are such things as "acceptable" levels of arrears. They just have to be managed better. Or are credit unions simply to abandon lending to this sector in society because of a series of notional percentages that a few pen-pushers who never worked behind a credit union counter came up with?
And despite what others seem to suggest, having high levels of savings is a good thing - these can be invested safely, and are less prone to risk.
That there are 425 credit unions in the country is a tribute to local communities - however, we have to be realistic too. Change will come, and the big challenge for credit unions is to manage this change. So far, there is no clear vision presenting for credit unions - if the core idea of credit union is to survive, it must be clearly defined - providing value-for-money financial services to members in a dignified and not-for-profit basis. This has to be done within an increasingly regulated environment. Credit Unions will have to face the reality of amalgamations to meet the new member needs that present. Credit Unions became relevant in the past by delivering relevant services to their members in their communities - the local hall, and then the Main Street became their delivery channel. Credit Unions must now re-state their relevance through opening up new delivery channels and through meeting members needs again.
Sure, there are dysfunctional credit unions, and there are celebrated instances of credit unions that have got things wrong. Significant changes will have to come. It comes less easy for Credit Unions - these are the creation of ordinary people who did something for themselves before "self-enablement" became a politically correct term. It will be hard for many to let go of the reins - some will see a loss of power; some will see a loss of influence; some will fear the end of the dream; some find the change painful.
For many activists, volunteer and professional, credit union is much more than about "financial Services" - it is about community, service, fair-play, dignity......
Change will have to come, including amalgamations, new IT, strategic alliances. However, if handled carefully, and with courage, it will lead to a Renaissance within one of the greatest social and financial movements in the country. It may draw inspiration from the successful change management effected by the other great social pillar of the country, the GAA.
And you'd never know, maybe an enlightened government just might devise a means of channeling surplus credit union savings funds into building local schools, social housing projects and community centres, instead of the Credit Unions investing surplus cash in multi-national, trans-national banks?