Let the revolution begin.
Some of the wording is brought up to date(ie changes of him/his to them/they)
Them/they in the ordinary sense of those words rather than that trans/non-binary stuff I hopeHad a skim through to see what would impact the average Joe.
Some of the wording is brought up to date (i.e. changes of him/his to them/they)
I will revert on the Bill shortly.Dr. Could you summarise what the Bill does?
I assume it's progressive and bans Credit Unions from insisting on holding shares while charging interest on loans?
Brendan
It might not be a requirement but loads of credit unions have specific products doing this.Need I remind Mr Burgess that the requirement on holding shares (apart from the minimum) in order to get a loan has ceased as long ago as the No 10 Bus to Belfield.
Not really sure there's much of a revolution to be ignited by any of that to be honest. The sharing a loans between credit unions is somewhat interesting and should allow for better loan concentration risk management but outside of that what's really going to change? I can also see some merit in the referrals to another CU where your own CU doesn't offer a product but it's hardly going to make a huge difference in the grand scheme of things. I assume the referring CU will get some sort of commission or referral fee for this?The main summary of the Credit Union (Amendment) Act 2023:
- to provide for the establishment of corporate credit unions;
- to amend the requirements and qualifications for membership of credit unions;
- to alter the scope of permitted investments by credit unions;
- to provide for changes to the governance of credit unions;
- to provide for the setting of maximum interest rates on loans by credit unions;
- to provide for the provision of services by credit unions to members of other credit unions;
- to provide for the participation by credit unions in loans to members of other credit unions;
- and for those purposes to amend the Credit Union Act 1997;
- and to provide for related matters.
So for example the heavy hand of the CBI on the most regulated business in the country is diluted slightly in that policies only now require a 3 year review rather than annually but no change to the vile 10% reserve;
Board and BOC meetings can be reduced from 10 to 6 annually;
Slight alteration in the limited scope of investments;
Interest rate ceiling can be lifted from 12.68%APR;
Corporate Credit Unions to provide services to member credit unions;
Referral of business from Credit Union A to Credit Union B without having common bond requirement and even if CU A have the service or product (a very important change);
Loan participation with other Credit Unions;
Allows for notifications of meetings by electronic means building on virtual meetings enabled already;
The killing of of him/ he etc.
All changes to 1997 Act and as usual we will be relying on Law Reform Commission to consolidate legislation as opposed to Oireachtas reviewing the full legislation in a consolidation.
As pointed out there is no legal requirement to have more shares than the minimum for a loan - but an individual Credit Union may see it differently. It should be noted that one of the principles is to promote thrift. A good idea when you consider large swathes of the population have virtually no reserve fund for unexpected expenses. A lot of people are short.
OK, so I can see how it's beneficial in the mortgage space. Say you have 3 credit unions based in Dún Laoghaire-Rathdown where the median house price is €630k but where none of the credit unions have the risk appetite for such a big loan, each of them could advance a loan of €210k (or whatever amount adjusted for their respective size/risk appetites), which based on the asset/loan book size for most credit unions would be far safer from a credit risk perspective. Seems very messy though.Well for example the business prevention wing of the CBI claim there are billions in unused limits for mortgages in CUs - except much of it is locked in Credit Unions that don't do mortgages so the nationwide element is somewhat retarded.
Another gender culture warrior I see!Them/they in the ordinary sense of those words rather than that trans/non-binary stuff I hope
Why?Them/they in the ordinary sense of those words rather than that trans/non-binary stuff I hope
On the mortgage front people assume this is rocket science and it is a slightly longer process than an unsecured loan needing assessment. It has a much longer duration and pays above the investment alternative. On credit risk there is diversity of the earnings/income that members have and the concentration risk in the credit union's common bond isn't therefore acute. The business expansion side of CBI has seen this and is encouraging a move to 15% (in the Regulations) and I don't see why this wont change again particularly at the exiting of several major FIs in the last while and the slow entry of others which many have suggested is because of the business prevention (hence no risk) side of CBI. Public exclamations are seen as capital offences and CBI are sensitive to criticism.
On the current account aspect given that many credit unions already had sophisticated electronic money transfer systems (after the barriers of entry were swept away by SEPA) an extension to current accounts was obvious. From the review of accounts, CUs show the fees and charges received and the direct costs of provision - many are already in positive earnings territory. Added to that in the Irish context many people keep large balances in their accounts and these are free funds as the banks' already know and are large contributors to income.
I don't understand what you're trying to say here? The legal process for a mortgage is fairly cumbersome and costly and that's just one part of the process.Mortgages may have considerably a longer process by duration but the amount of time spent on a mortgage is hours not days. Seen and conducted detailed process reviews of FI including the major suppliers and with further uploading of documents by applicants this transfers the work from FI to applicant.
OK, that might generally be the case but I'm sure there are plenty of credit unions that do have large local employers or exposures to particular sectors. Most of the industrials seem to be public sector ones so I'm sure they're pretty safe but is that always the case? It's kind of besides the point anyway. I'm talking primarily about loan concentration at loan book level.On risk concentration - given the penetration rates of in the area of operation for 'community' CUs one doesn't get concentration in one business and the occupations are spread.
OK, so I've looked at that CU's annual report. They have 2,087 current accounts opened, opening a total of 461 in the last financial year. The previous year they had 2,043 at year-end so they had a net gain of 44 accounts. They have a membership of 35k according to their website so that's about 6% of all members. They introduced them some time in 2019 having spent years developing them before that. They are still making a loss on them. They would have had huge capital outlays to develop them. That seems like an awful waste of time and money. If this is replicated across credit unions then I'm right in saying that it's a white elephant.As Financial Statements for CU are not published by CBI reliance is placed on those that put them up on their website. Core Credit Union as one example show:
- Current Account income and fees recovered €125,178
- Current Account charges €136,665.
So on a contribution basis this is not a significant loss. In addition people in Ireland keep large balances in their current account and this has been remarkably consistent over the years and balances are growing.
Well the massive misapprehension you are labouring under is that the development cost was huge and was incurred singly when it was incurred by a larger group of Credit Unions and wasn't huge. Your assertion that it is a while elephant does not stand up to scrutiny as digital services were not new to Credit Unions. The only way to alleviate you of your slight prejudice is to become a Board member of a CU [no fees sorry] and then see first hand what is actually being done. [This particular development was PAYAC and was run by a number of CUs and ILCU were not involved and was a most successful development].OK, so I've looked at that CU's annual report. They have 2,087 current accounts opened, opening a total of 461 in the last financial year. The previous year they had 2,043 at year-end so they had a net gain of 44 accounts. They have a membership of 35k according to their website so that's about 6% of all members. They introduced them some time in 2019 having spent years developing them before that. They are still making a loss on them. They would have had huge capital outlays to develop them. That seems like an awful waste of time and money. If this is replicated across credit unions then I'm right in saying that it's a white elephant.
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