Engendered11
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I would dearly like you to comment further in respect of your beloved Sandmount CU being subsumed into Dundrum & why you deem there is now too much regulations
Sandymount CU et al,
- Thread starter Engendered11
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Brendan Burgess
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This is a response to a comment piece, I had in yesterday's Sunday Times
This month, Sandymount Credit Union, of which I am a member, is being taken over by Dundrum Credit Union. But Sandymount Credit Union serves its members much better than the larger Dundrum Credit Union. Its dividend rate on members’ savings is double that of Dundrum and its interest rates on loans are lower.
So why is Sandymount allowing itself to be swallowed up by Dundrum? Part of the justification given in the letter to members is that it is extremely difficult for a small credit union to comply with the increasing regulations imposed by the Central Bank. It is shocking that a relatively successful Credit Union gives up the ghost due to over-regulation. Sandymount is a rock-solid credit union. It has just enough cash and investments to return all its members’ savings i.e. it has accumulated enough profits over the years to fund its loan book without any of its members’ savings. Look at it another way, if 100% of the loans to members go bad, Sandymount would still be able to repay its savers’ money in full. Many Irish Credit Unions are in a similar position. Yet, they still face disproportionately excessive and onerous regulation.
This week the Central Bank published the results of the International Credit Union Regulators’ Network independent review of the Central Bank’s performance of its functions. It was pleased that the Review concluded that “The Central Bank regulates and supervises Credit Unions effectively”. I am sure that many members of Credit Unions across the country would disagree with that assessment.
This month, Sandymount Credit Union, of which I am a member, is being taken over by Dundrum Credit Union. But Sandymount Credit Union serves its members much better than the larger Dundrum Credit Union. Its dividend rate on members’ savings is double that of Dundrum and its interest rates on loans are lower.
So why is Sandymount allowing itself to be swallowed up by Dundrum? Part of the justification given in the letter to members is that it is extremely difficult for a small credit union to comply with the increasing regulations imposed by the Central Bank. It is shocking that a relatively successful Credit Union gives up the ghost due to over-regulation. Sandymount is a rock-solid credit union. It has just enough cash and investments to return all its members’ savings i.e. it has accumulated enough profits over the years to fund its loan book without any of its members’ savings. Look at it another way, if 100% of the loans to members go bad, Sandymount would still be able to repay its savers’ money in full. Many Irish Credit Unions are in a similar position. Yet, they still face disproportionately excessive and onerous regulation.
This week the Central Bank published the results of the International Credit Union Regulators’ Network independent review of the Central Bank’s performance of its functions. It was pleased that the Review concluded that “The Central Bank regulates and supervises Credit Unions effectively”. I am sure that many members of Credit Unions across the country would disagree with that assessment.
Brendan Burgess
Founder
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Hi Engendered
As I point out, Sandymount is very secure. It can repay all its members' funds from its cash and investments. It poses no risks whatsoever to members' savings.
So the intrusive regulation from the Central Bank is simply not necessary.
Intrusive regulation and limits on lending are necessary for those credit unions with much lower reserves. And it was the lending limits and intrusive regulation which stopped credit unions going mad during the Celtic Tiger era.
The Credit Union model faces problems and I am not so sure it will survive. Merging credit unions won't help.
Brendan
As I point out, Sandymount is very secure. It can repay all its members' funds from its cash and investments. It poses no risks whatsoever to members' savings.
So the intrusive regulation from the Central Bank is simply not necessary.
Intrusive regulation and limits on lending are necessary for those credit unions with much lower reserves. And it was the lending limits and intrusive regulation which stopped credit unions going mad during the Celtic Tiger era.
The Credit Union model faces problems and I am not so sure it will survive. Merging credit unions won't help.
Brendan
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Engendered11
Registered User
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I am not now a CU activist but what I find difficult to understand is that a number of years after the large write down of Loans etc many of what I consider like you very sound and well run Credit Unions are still carrying loan provisions of 14-18%. These percentages in real terms equate to 20-25% of the Risk Loans (Risk Loans is the actual figure minus the associated Shares). The other problem I have is that many Credit Unions are loath to tell their members what their actual arrears situation is and in addition there is insufficient information in the notes to the accounts on Section 35 Loans. Why are Credit Unions year on year increasing their shareholdings when the return on the other side of the entry is zilch. To add to this I understand that an individual member can now have up to Euro 100,000.00 in their account. Surely, this unnecessary change is only going to make matters worse.
Gerry Canning
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Engendered11,
Having worked in the past for credit unions in my own county on arrears ,I would confirm that they now have a good safe handle on arrears issues.
No doubt from 08 to circa 12 the arrears were a serious and potentially deadly problem.
Individual members can have k100.
To my knowledge no CU member has lost funds , nor are likely to.
Anyone can hold millions in any Bank ,yet most are still in bust -mode? So I don,t see thisK100 worsening matters.
Brendan,
I would be inclined to agree that this mega-merging won,t help CU,s.
Their Model I am sure faces issues but I have confidence in their adaptability.
Not so sure it was intrusive legislation that stopped them going mad in the (fluffy) times.
I found most to be fairly cautious.
Having worked in the past for credit unions in my own county on arrears ,I would confirm that they now have a good safe handle on arrears issues.
No doubt from 08 to circa 12 the arrears were a serious and potentially deadly problem.
Individual members can have k100.
To my knowledge no CU member has lost funds , nor are likely to.
Anyone can hold millions in any Bank ,yet most are still in bust -mode? So I don,t see thisK100 worsening matters.
Brendan,
I would be inclined to agree that this mega-merging won,t help CU,s.
Their Model I am sure faces issues but I have confidence in their adaptability.
Not so sure it was intrusive legislation that stopped them going mad in the (fluffy) times.
I found most to be fairly cautious.
Hello,
I believe that the Cental Bank have an agenda here and that is to "encourage" a significant reduction in the number of credit unions in existence in Ireland, from what I beleive to be circa 400 credit unions, down to perhaps as low as 100 credit unions (or even less). Clearly, the lower the number of credit unions, the easier the supervisory role becomes for the Central Bank (notwitstanding the obvious need to deal with badly run or badly funded Credit Unions which I consider an entirely seperate, but most important, matter).
It would be very interesting to see what would happen if members of a financially sound credit union (such as Sandymount, for example) were to demand that the credit union be closed and liquidated (rather than merged with Dundrum) with all net reserves distributed to the membership. Thereafter, if Sandyford Credit Union no longer existed, former memers could joint another credit union (perhaps Dundrum if it's area under the "common bond" now extended to include Sandymount).
I believe that the Cental Bank have an agenda here and that is to "encourage" a significant reduction in the number of credit unions in existence in Ireland, from what I beleive to be circa 400 credit unions, down to perhaps as low as 100 credit unions (or even less). Clearly, the lower the number of credit unions, the easier the supervisory role becomes for the Central Bank (notwitstanding the obvious need to deal with badly run or badly funded Credit Unions which I consider an entirely seperate, but most important, matter).
It would be very interesting to see what would happen if members of a financially sound credit union (such as Sandymount, for example) were to demand that the credit union be closed and liquidated (rather than merged with Dundrum) with all net reserves distributed to the membership. Thereafter, if Sandyford Credit Union no longer existed, former memers could joint another credit union (perhaps Dundrum if it's area under the "common bond" now extended to include Sandymount).