IFSRA's guide to personal loans

Brendan Burgess

Brendan Burgess

Founder
Messages
54,789
I don't know when [broken link removed] was launched? It seems to have been launched quietly.

It should be pulled quickly and corrected. In two pages on Credit Union loans it never, ever once mentions that most Credit Unions require the borrower to have shares of up to 25% of the amount borrowed. The guide never mentions that Credit Unions which have this requirement charge an effective APR of up to 18%. As I have pointed out before, if any other financial institution sold a linked product like this, we would be waving placards outside their front door.

Brendan
 
> I don't know when this was launched? It seems to have been launched quietly.

31st May according to this:

[broken link removed]
 
I have emailed a complaint to Mary O'Dea and to Bernard Sheridan the Head of Consumer Information and asked them to withdraw the booklet.

Brendan
 
Brendan:

Could you coax IFSRA into having a 'column' here ?

They would get some very useful feedback. Many of the posters - particularly yourself - go to great trouble and effort in compiling answers and offering very helpful suggestions.

They could issue 'draft' reports that many folk here would give feedback on -- if IFSRA felt that was useful.
 
I will certainly suggest it to them.

They could also publish their guides on their own website before printing or launching them. We could then correct them. And they could accept or reject the corrections as they see fit.

Brendan
 
Rather than having an AAM column it might help if IFSRA actually first acknowledged and replied to consumer queries emailed to them. I sent them a complaint about a particular financial product recently and never received anything back. Previous emailed complaints/queries did elicit responses though.
 
I see from reading yesterday's Irish Times, that this misleading guide was actually launched on Wednesday.

This is the reply I got yesterday:

We have considered the issue you raised in relation to the section on credit unions in our Independent consumer guide to personal loans and credit. We do not believe that the guide is misleading. I set out below a number of points on the issue you raised.

The guide is attempting to give consumers some idea of the typical rates charged without going into the detail of how the APR for each loan is calculated.

The guide refers to the fact that some credit unions will want consumers to have saved for a while before they give out a loan.

APR is calculated on the amount borrowed and not adjusted for any security held. When the Consumer Credit Act is updated credit unions will have to comply with the standards for calculating APR. However there will be no provision in relation to netting.

Shares held by the credit union are held as collateral for the borrowing. The point of offsetting the savings/dividends against any borrowings could be made in the context of other institutions e.g. secured loans and the proposed principle is not applied in that case.

It would not be possible to offset dividends on shares, which are paid at the discretion of the credit union at the end of the year, against interest paid on borrowings.
Not all credit unions require savings to be held before a loan is granted.
Click to expand...

This is the same type of reply I got from their defence of the BCP Quadruple Growth Bond. It's the response I would have expected from the Central Bank defending the financial institutions it regulates, rather than the response I would expect from a consumer oriented organisation.



Brendan
 
I think the point you raised about the CU is relevant. Particularly as the CCA more or less says that parallel products cannot be force fed to customers ..or the whole Bank goes to jail .. and all that.

Once IFSRA (or anybody else) actually sticks their neck out, they are going to do whats needed to prevent a troublesome amendment. Basically their approach to what you say is that sure .. we ignore collateral matters altogether!

Mind you the CUs generally give a generous dividend.

On top of that ..it was always taxable at top rate tax ..since 1966...and is a bigger tax evasion scandal than all the off shore stuff put together .. and the fact that all that was pushed under the carpret shows they have a neck bigger than certain parts of a jockeys anatomy!

Politics dear boy.. politics !!
 
You must log in or register to reply here.
Back
Top