# Credit Union still insisiting on guarantor



## Danielle24

Hi,

Not sure where to post this, feel free to move etc if not appropriate for here.

Basically i've been with credit union for about 8/9 years. I've cleared a large amount of loans with them, however they're still insisting I need a guarantor if I want a loan with them. They keep saying when you clear this loan etc, however I cleared my last loan bar one payment as needed to top up at the time and they still wanted a guarantor. I haven't missed a payment with them in about 6 years but they're still saying well there's a history on the account. Is this normal? I know they're gone very strict but it seems OTT. 

They phoned me before about a relatives account who owed them money and have also mentioned when i've gone in to them, and it was mentioned that this could affect me.

Its so humiliating to have to ask people, i'm a proud person and don't like to rely on people for anything.


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## Complainer

Danielle24 said:


> Basically i've been with credit union for about 8/9 years. I've cleared a large amount of loans with them, however they're still insisting I need a guarantor if I want a loan with them. They keep saying when you clear this loan etc, however I cleared my last loan bar one payment as needed to top up at the time and they still wanted a guarantor. I haven't missed a payment with them in about 6 years but they're still saying well there's a history on the account. Is this normal? I know they're gone very strict but it seems OTT.


I'm a bit confused now. Do you still own them money? How much? Is it overdue? Are you looking for a further loan now?


Danielle24 said:


> They phoned me before about a relatives account who owed them money and have also mentioned when i've gone in to them, and it was mentioned that this could affect me.


Bizarre. How close a relative are we talking about?


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## Danielle24

Complainer said:


> I'm a bit confused now. Do you still own them money? How much? Is it overdue? Are you looking for a further loan now?
> 
> Bizarre. How close a relative are we talking about?


 
Sorry, I might not have explained myself very well. Yes I still owe them money however before I applied for my current loan they'd said if I cleared my last loan that I could apply for another loan. I only had one payment left on my previous loan when I applied for current loan and they said I still needed a guarantor. I want to top up my loan and they said no I have to have a guarantor, it seems no matter if I clear 100 loans with them they're going to insist on a guarantor. My account hasn't been overdue in about 6 years. I never miss a payment. I owe them 1600e, have 500e in my savings and I am paying them back 200e a month.

Immediate family.


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## Slim

Danielle24 said:


> Hi,
> They keep saying when you clear this loan etc, however I cleared my last loan bar one payment as needed to top up at the time and they still wanted a guarantor. I haven't missed a payment with them *in about 6 years but they're still saying well there's a history* on the account. Is this normal?
> 
> They phoned me before about a relatives account who owed them money and have also mentioned when i've gone in to them, and it was mentioned that this could affect me.


 
The bold above is to emphasise that they may have reservations about your ability to repay the loan. Depends on your savings to loan ratio. If you are an adult in employment with a reasonable loan/savings ration, I think you should stand your ground on the guarantor.

As to the underlined piece above, I have reservations about them ringing you about a relative's loan unless you were a guarantor yourself. If so, that will definitely affect your borrowing capacity as long as your relative is in arrears and you are guarantor.

There are what is called "connected accounts". For example, if you were dependant on a parent or partner for your existence, if they are in arrears you may not be as able to borrow. If you are independent of your parent or partner or other relative, they cannot connect you. 

I think a chat with the manager might help. Slim


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## Danielle24

Thanks Slim.

I've had loans pretty much constantly in that 6 years for various different reasons. I have not missed on payment since then. I'm not a guarantor for the relative and have not been at their residence for about 7 years. I have also being working for 10 years and have a good job/salary at the moment. I just feel so frustrated with their carry on. I got quiet annoyed with the girl on the phone this morning and the same when they rang about relatives account, threatened to close my account if they didn't take my name off their account as a contact etc.


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## Slim

Danielle24 said:


> Thanks Slim.
> 
> I've had loans pretty much constantly in that 6 years for various different reasons. I have not missed on payment since then. I'm not a guarantor for the relative and have not been at their residence for about 7 years. I have also being working for 10 years and have a good job/salary at the moment. I just feel so frustrated with their carry on. I got quiet annoyed with the girl on the phone this morning and the same when they rang about relatives account, threatened to close my account if they didn't take my name off their account as a contact etc.


 
Why is your name on your relative's account as a contact? Maybe that is why they are ringing you? Anyway, insist that you are your own person and not dependant on anyone else for a measly CU loan. Slim


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## horusd

Contacting the OP about a loan that's nothing to do with her seems very odd. Surely there are issues of confidentiality for the other party, not just the OP?


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## Danielle24

They said they had my name down they obviously knew we were related. To be clear I never gave them authorisation to do this. I have told them that I have more than proved myself but they're not budging. Anyways there's a credit union in another town nearby which I would probably be allowed to open an account in as I am not based in either town just outside them, so i'm gonna open one with them and start saving for a loan with them and clear with the other CU.


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## Complainer

Try your own bank as well. The worst thing that can happen is that they'll say no.


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## Danielle24

horusd said:


> Contacting the OP about a loan that's nothing to do with her seems very odd. Surely there are issues of confidentiality for the other party, not just the OP?


 
I would have thought so, but seemingly no. They said this could affect me applying for a loan in the future which to be honest I think is insane.


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## Billo

Danielle24 said:


> Hi,
> 
> Not sure where to post this, feel free to move etc if not appropriate for here.
> 
> Basically i've been with credit union for about 8/9 years. I've cleared a large amount of loans with them, however they're still insisting I need a guarantor if I want a loan with them. They keep saying when you clear this loan etc, however I cleared my last loan bar one payment as needed to top up at the time and they still wanted a guarantor. I haven't missed a payment with them in about 6 years but they're still saying well there's a history on the account. Is this normal? I know they're gone very strict but it seems OTT.
> 
> They phoned me before about a relatives account who owed them money and have also mentioned when i've gone in to them, and it was mentioned that this could affect me.
> 
> Its so humiliating to have to ask people, i'm a proud person and don't like to rely on people for anything.



Try to get yourself into a credit situation. IMHO taking out loans time and time again is not a good situation to be in.


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## Complainer

Danielle24 said:


> They said this could affect me applying for a loan in the future which to be honest I think is insane.


Insane indeed - ask for them to give you this in writing, and when they refuse, let them know that they have shot themselves in the foot.


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## Bronte

horusd said:


> Contacting the OP about a loan that's nothing to do with her seems very odd. Surely there are issues of confidentiality for the other party, not just the OP?


 
But credit unions are small and everybody knows everybody.  It goes the other way too, say your parents and siblings have loans and are good payers they credit union is bound to think that's a family who pays it's debts.


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## Bronte

Danielle24 said:


> . Anyways there's a credit union in another town nearby which I would probably be allowed to open an account in as I am not based in either town just outside them, so i'm gonna open one with them and start saving for a loan with them and clear with the other CU.


 
Your credit union must have a very good reason for not wanting to give you another loan outright.  It's not good to be constantly in debt.  Instead of getting another loan, how about saving and learning to buy from savings rather than borrowing to spend?


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## MANTO

I suspect this may not be unique to yourself. Credit Unions are increasingly wary of giving a top up on an existing loan since the Central Bank of Ireland issued Section 35 in Nov 10.

A few points from Section 35:

*Minimum Liquidity Requirements 

1.1 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]A credit union must at all times keep a proportion of its total assets in liquid form so as to enable the credit union to meet its liabilities as they arise[/FONT][/FONT][FONT=Verdana,Verdana][FONT=Verdana,Verdana]2[/FONT][/FONT][FONT=Verdana,Verdana][FONT=Verdana,Verdana]. [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana] 
[/FONT][/FONT]*1.2 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]Credit unions are required to maintain a [/FONT][/FONT]*minimum Liquidity Ratio of not less than 20 per cent3 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]on an on-going basis[/FONT][/FONT][FONT=Verdana,Verdana][FONT=Verdana,Verdana]4[/FONT][/FONT][FONT=Verdana,Verdana][FONT=Verdana,Verdana]. [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana] 
[/FONT][/FONT]*1.3 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]Notwithstanding this minimum liquidity requirement, it is the responsibility of the board of directors of each credit union to decide on the amount of liquid assets to hold in excess of the minimum, taking prudent account of the scale and complexity of the credit unions business, its funding requirements and prevailing market conditions. [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana] 
[/FONT][/FONT]*1.4 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]Where it is considered appropriate, the Registry may set a ratio for a credit union, or a category of credit unions, that is higher than the minimum Liquidity Ratio. [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana] 
[/FONT][/FONT]*1.5 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]Credit unions whose liquid assets are in excess of 20 per cent of unattached savings must continue to maintain liquid assets at such higher levels as are deemed prudent. [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana] 
[/FONT][/FONT]*1.6 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]The board of directors of the credit union must inform the Registry immediately should the Liquidity Ratio fall below 20 per cent and take the appropriate measures to restore the Liquidity Ratio to the required level as soon as possible. The timeframe in which the ratio will return to compliance must be agreed with the Registry. 
[/FONT][/FONT] 
*Lending Over Five Years *
*Minimum Liquidity Ratio *
[FONT=Verdana,Verdana][FONT=Verdana,Verdana]>20% and <25% [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana]at least 25% [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana]≥25% and <29% [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana]over 25% [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana]≥29% [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana]at least 30% [/FONT][/FONT]


*Lending Practices for Rescheduled Loans *

​*2.1 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]Loans must only be rescheduled in exceptional circumstances, at the request of the member and where relevant, with the agreement of the guarantor. [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana] 
[/FONT][/FONT]*2.2 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]An application to reschedule a loan must be supported by appropriate fact finding and a new loan application. The application must be accompanied by evidence of the members request to reschedule the loan and evidence of the change in the members circumstances.[/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana] 
[/FONT][/FONT]*2.3 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]Loans must only be rescheduled with the agreement of the member and where relevant, the guarantor. A new credit agreement must be drawn up and the member must be made aware of any changes to the information contained in the original credit agreement, including changes to the cost of credit. [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana] 
[/FONT][/FONT]*2.4 *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]The new repayment schedule put in place for [/FONT][/FONT]*all *[FONT=Verdana,Verdana][FONT=Verdana,Verdana]rescheduled loans must not be less frequent than quarterly. [/FONT][/FONT]
[FONT=Verdana,Verdana][FONT=Verdana,Verdana] 
[/FONT][/FONT]*2.5 In general, further credit must not be granted where a loan has been rescheduled. *

Credit Unions have always been seen as an easy way to obtain credit, but those days are gone. 

CUs must be more prudent nowadays regardless of the customers previous credit history, due to new regulations introduced.

The above may not be in the OPs case, but it reflects how CUs are operating in these times.


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## Bronte

MANTO said:


> [FONT=Verdana,Verdana]
> [/FONT]*2.5 In general, further credit must not be granted where a loan has been rescheduled. *
> 
> CUs must be more prudent nowadays regardless of the customers previous credit history, due to new regulations introduced.
> 
> The above may not be in the OPs case, but it reflects how CUs are operating in these times.


 
And that's all only right and proper.  It should never have been any other way.


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## Danielle24

Bronte said:


> And that's all only right and proper. It should never have been any other way.


 
Yes but i've cleared loans with them completely?


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## Bronte

Danielle24 said:


> They keep saying when you clear this loan etc, however I cleared my last loan bar one payment as needed to top up at the time and they still wanted a guarantor.
> 
> Its so humiliating to have to ask people, i'm a proud person and don't like to rely on people for anything.


 
But you said above that you had not paid back the loan. 

Also seem to remember that in previous threads you had money management issues.  You have to ask yourself, did I clear all prior loans with the credit union as per the original agreement, if you did not, notwithstanding that you did eventually clear the loans then you do not have a good credit history.  And it's not a good credit history to continuously borrow to spend no matter. 

Where is the humiliation? Don't see this anywhere? If it's too difficult to ask a guarantor then how about going the old fashioned route of saving and then spending when you can afford it.


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## Danielle24

Bronte said:


> But you said above that you had not paid back the loan.
> 
> Also seem to remember that in previous threads you had money management issues. You have to ask yourself, did I clear all prior loans with the credit union as per the original agreement, if you did not, notwithstanding that you did eventually clear the loans then you do not have a good credit history. And it's not a good credit history to continuously borrow to spend no matter.
> 
> Where is the humiliation? Don't see this anywhere? If it's too difficult to ask a guarantor then how about going the old fashioned route of saving and then spending when you can afford it.


 
I have cleared numerous loans with the Credit Union. The loan i'm applying for is for college fees not "spending". You might not be embarrassed or humiliated in asking this request of someone but I would be.


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## truthseeker

Danielle24 said:


> The loan i'm applying for is for college fees not "spending".


 
How are college fees not 'spending'? Its a luxury - not an entitlement or a basic human right.


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## Danielle24

truthseeker said:


> How are college fees not 'spending'? Its a luxury - not an entitlement or a basic human right.


 

Lol, okay so i'll drop out will I?


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## Brendan Burgess

truthseeker said:


> How are college fees not 'spending'? Its a luxury - not an entitlement or a basic human right.



I think that Danielle is quite clear in that she is not borrowing for lifestyle borrowing such as going on holidays. She is borrowing for education which may well be an investment. 

Danielle

The Credit Union is supposed to be a community and member based organisation. As a shareholder, you own the credit union. You should write to the Chairman and make a complaint in the strongest possible terms and ask for their credit committee or the manager to respond in writing.

If you do not get a satisfactory response, go to the AGM and kick up a fuss. 

if you get a response in writing that your loan was refused because of your relative's problems, then you will definitely have a case for the Financial Ombudsman. 

As it is, you should consider talking to the Data Protection Commissioner. A family's history might be relevant for a first time borrower, but if you have a long and good credit record with them, then it should be irrelevant. 

If I was struggling with a loan, I would be furious if the lender discussed my affairs with a relative. Your relative may well have a case for the Ombudsman as well. 

Having said all that, the Central Bank's regulations have swung way too far and it's making it difficult for CUs to give loans. 

Brendan


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## Danielle24

Thanks Brendan,

I might just do that as I can't see how they can justify their actions when I haven't missed payment in 5/6 years.


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## steph1

Totally agree with Brendan's comments above.  I was involved in the Credit Union movement years ago in Dublin.  
The whole ethos of the movement was that it was a group of members who came together to save on a regular basis and thus provide loans for themselves and their fellow members.  It promoted thrift i.e. you had to save regularly and your savings thus enabled you to get a loan.  The area was known as a common bond which usually meant a particular area drawn on a particular district or it could mean a work area and anyone living or working in that common bond was entitled to become a member.
Then the whole thing seemed to change as people started demanding higher loans for deposits on houses.  When I was involved the maximum loan was 3 times your shares to a maximum which may have been around 4k.  Then some credit unions started offering loans up to 10 times the shares held and they really started to become like banks.  
Many people myself included just paid down our loans to a certain level and then topped up again.  Nothing wrong with that as usually the loans were small compared to some loans nowadays.  
I just feel that the founders of this great movement one of whom I knew RIP must be spinning in their graves with the way the movement has gone forward - and personally I feel its the wrong way.  By all means loan money for cars etc and things like home improvements that people need.  It became more a business than a community based organisation which was really to help people to help themselves.  And a lot of people in Ireland today would be very badly off but for the Credit Unions as a lot of older people did not have bank accounts and had little or no access to any other form of credit.
Now like everything else in this country there is a regulator and rules and bureaucracy which hinder the very people that the movement was set up to help and support.


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## steph1

As regards some of the comments made by the OP, nobody should discuss any other members's loan with another member - unless that member is acting as a guarantor and the person who has the loan is in arrears or is in difficulty meeting their repayments.  Usually that would have been done by a letter to the guarantor who also must be a member of the credit union, or by perhaps an interview with a member of the Credit Committee.  I would have serious issues with that and the OP should write a letter to the secretary or ask to speak to somebody on the credit committee.
Members of credit unions should attend their AGMs but unfortunately like everything else the running of credit unions is usually left up to a few and really other members need to get involved.  Board members act in a voluntary capacity.  
Maybe the credit unions lost the run of themselves.  Now the whole ethos of the organisation has collapsed.  Members looking for small loans that they had no problem getting in the past, find that this line of credit is now no longer available to them.  I have heard stories from friends and relatives who are long standing members in their credit unions, that they are having difficulties getting even small loans and credit unions are looking for bank statements and other documentation where before this was never an issue.  And a lot of people who had accounts in their local credit unions did not deal with banks at all.  Sad really that it has come to this.


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## Danielle24

Thanks Steph


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## Danielle24

Just to give an update I went into the credit union and said to them id clear the balance (€1200) and could I then take out a loan of €1500 in my own name with no guarantor etc, they said they'd just give me the loan of €300 and that i'd be fully responsible for the entire balance, result


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## Mongola

Danielle24 said:


> They said they had my name down they obviously knew we were related. To be clear I never gave them authorisation to do this. I have told them that I have more than proved myself but they're not budging. Anyways there's a credit union in another town nearby which I would probably be allowed to open an account in as I am not based in either town just outside them, so i'm gonna open one with them and start saving for a loan with them and clear with the other CU.


 
Danielle24, I would forget abt the guarantor for a minute and would investigate really why do they have you linked with a close family member. You said that you were not a guarantor for them so this is quite bizarre and in my opinion, it would be worth getting to the bottom of that first. 
It seems that they have you linked to them for a reason...you need to find out why


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## Danielle24

Yes because said family member was in arrears. I'm going to give them the benefit of the doubt and see how they treat me now that the account balance is solely in my name.


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## Slim

Danielle24 said:


> Yes because said family member was in arrears. I'm going to give them the benefit of the doubt and see how they treat me now that the account balance is solely in my name.


 
Can you tell us how you got on with the CU, with regard to the 'connected accounts' issue and the loan guarantor? Slim


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## Danielle24

How I got in? As in how I joined? Just the normal route.


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## Slim

Danielle24 said:


> How I got in? As in how I joined? Just the normal route.


 
...got on... As in how did your interaction with the CU go? The guarantor issue?


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## Danielle24

Oh. I didn't push the issue in the end the account is now solely in my name and they allowed me to get a top up on my loan. If there's any issues in the future I will take the matter further.


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## Bronte

Glad you got sorted out, you're a real fighter Danielle, thanks for coming back with what happend.


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