Bad debts are worrying but credit unions have been limited in their lending activity in recent years. Yes, some are suffering pain now but many are doing well. There has been an explosion in lending growth in the last decade, but credit unions have not experienced this same growth due to inherent restrictions and an increased competitive marketplace. This may be a blessing as this mortgage lending and consumption binge is now effecting the banking sector in far more adverse ways. Bad debts in a recession are inevitable, but this has been largely mitigated by many credit unions through a re-enforcement of prudent lending standards.
As regards liquidity, the movement won't allow a credit union to ultimately fail. The domino effect would be far too dangerous as the public doesn't perceive the movement as being independent from one another. The Savings Protection Fund (yes, it has been a disaster in the past!) can be used to stabilise a credit union in times as such. Short term liquidity problems can be solved.
Yes no dividend is disappointing for some. However, savers who use credit unions for their dividend payment have left within the last decade to seek more competitive rates. The majority of savers and also borrowers. They use the credit union for their lending facilities also. The majority of traditional, loyal members realise that a credit union is not profit driven.
The proposed changes and criticisms aimed at the movement are not represetative of the whole movement and are based on past experience of foreign credit union movements, which are at a FAR more developed stage, a lot more complex, and have a different market to serve.