New legislation for Credit Unions

[NoRegretsCoyote]

Interesting story today on new legislation for CUs:

Minister of State with responsibility for financial services Seán Fleming said the planned credit unions legislation he is working on contains “no silver bullet” for a movement weighed down by excess deposits and muted lending, and that it is mainly up to the sector to help itself.

Mr Fleming said he hoped to pitch the heads of a Bill next month to Cabinet, aimed at enabling credit unions to co-lend and collaborate more. It follows up on a programme for government commitment to review the wider legislative framework around the sector.

“There is no legislative silver bullet for the credit union movement. All we can do is pass legislation to enable them to lend.

Some changes coming to allow them to collaborate, but nothing major I think:

The planned new legislation aims to make some amendments around the area of credit unions’ common bonds, where members of community unions must be from a certain area. A relaxation of common bonds would allow credit unions to introduce business to larger credit unions and potentially co-lend on projects.

I don't see anything there that will help CUs with structural problems of too many deposits and too few lending opportunities.

 

[Paul O Mahoney]

Well the common bond restriction was really never adhered to in the few I have knowledge of.

Consolidation between CUs has been happening for years and that hasn't really improved things.

From experience I can't see two credit unions coming up with acceptable that would allow them to co-fund community based projects. The idea is fine but the local politics and parochial nit picking would be difficult to overcome.

The CUs are a fantastic financial movement and should be developed further but that development needs the buy in of all stakeholders.

 

[ClubMan]

The CUs are a fantastic financial movement and should be developed further but that development needs the buy in of all stakeholders.

In broad terms what does that mean in practice?
The CU was a fantastic resource in my parent's days when they were getting the loan to purchase their home from the Corpo and using the CU for larger purchases thereafter when they probably couldn't get a loan elsewhere.
But now that they're swamped in cash (that could presumably be freed up an and used for much more productive purposes) and are somewhere between vague and misleading in how loans and other products are priced for members, I'm not sure that they're still a fantastic resource.
Unless I'm missing something?