The lending policies of Credit Unions

Re: Show Me the Money

It is unfair and dishonest to tell people that this is for their benefit. These people may well trust the CU and apply the same logic to credit card debts, mortgages etc.
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I think this aspect of your argument is unfair. The members of a CU are the CU and profits are reditributed in this way. My credit union, for example, has a rebate of some interest paid at the end of each year. I think Slim is pointing to the community ethos of the CU movement in that the benefit is to the members as a group and not as individuals.

Your arguments about interest rate/APR are, of course, correct. I think it is fair to say the CU movement has been slow to adapt to very sophisticated, financially aware customers and they will need to adapt to the accepted standards to survive.
 
Re: Show Me the Money

I think it is fair to say the CU movement has been slow to adapt to very sophisticated, financially aware customers and they will need to adapt to the accepted standards to survive.
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ted, do you realise how bad that sounds? for me it contains a strong implication about CU attitudes towards the intelligence of their existing customers.
 
Re: Show Me the Money

I know how it sounds. Most of the credit unions I know well are in areas of relative (at least historical) deprivation where moneylenders controlled the finances of many families. My impression is that these credit unions are set up by well-intentioned individuals and small groups of people. They are run by a mixture of volunteers and employees. I think many of them see it as part of their remit to "look out" for people, in a sort of paternalistic way. Their publications advocate the need for thrift. The whole "saving while you borrow" philosophy is really a way to try to teach people to save, to avoid debt and to avoid moneylenders. So I don't think it's unfair to say that they have simplified the message they deliver in an attempt to promote a savings "mentality" or "habit".

In my view, this underestimates the intelligence of some but not all of their customers. I do not believe its origin is disrespect for customers but rather a somewhat outdated paternalistic aspiration to "save people from themselves".

tedd

Declaration of interest: I am a member but not an employee of a CU.
 
Bag ?

Are any of the bigger CU's worth holding as a carpetbagging opportunity ?
 
Re: Bag ?

tedd it doesn't strike me as encouraging thrift by championing the
notion that borrowing money at a high rate of interest and loaning it
back at a lower rate has some financial benefit. the advice to do this
does not benefit the customers, it benefits the cu itself. i find this
end justifies the means (i.e. lying) attitude objectionable.

we are going in circles i think but i'm not suggesting that cu should do
a better job of adapting to "sophisticated customers". i'd just rather
the cu's were straight up and honest with people and didn't propagate
financial untruths seemingly motivated by the notion that the advice
ultimately benefits the member. there's something animal farmish about
this whole approach.
 
Re: Bag ?

the advice to do this does not benefit the customers, it benefits the cu itself
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Hi Darag - You seem to be missing the point which Tedd made earlier that being a mutual organisation, the CU IS the members - so what benefits the CU does benefit the members.
 
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so what benefits the CU does benefit the members.
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Sorry, but that's simply not true - take for example:

- the ILCU computer system fiasco and all the wasted millions on various consultants' fees that entailed before being abandoned (Ireland's answer to the infamous LSE Taurus project perhaps?)

- the monopolistic attitude of the ICLU which insisted that all member unions buy insurance products from a single provider which was far from the cheapest

- the development of certain CU's (my own in particular) of fancy and expensive office spaces far beyond the union's or their customers' needs
 
Re: .

Hi Skinflint - I take your point, but actually, I think it still is true, but what I omitted to say was that what damages the CU also damages the members.
 
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In some recent cases what benefited the ILCU top brass damaged the ILCU, individual unions and the members!
 
Re: Carpetbagging the CU.

Tommy

You would have to qualify as a holder of the "common bond" to join the CU of your choice. According to the credit union rules, there is no chance of demutualising a credit union.

Skinflint

The Computer System fiasco cost the members IR£27m and set back the movement in its goal of modernising the technology. However, this was a result of amateurish incompetence and there is no evidence that any of it benefited the ILCU members/brass.

You must all remember what was said above. The CU was created in different times and is modernising as best it can given that each CU is independent and is mostly run at policy and strategy level by volunteers. THe ILCU is undergoing radical change and will be some time before it gains credibility with CUs.

CUs do not mislead members. I have outlined above why we/they encourage savings and borrowings simultaneously.

Slim 8)
 
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OK - maybe it was not related to the ISIS project but this SBPost article ( [broken link removed] ) includes the following snippet:

"The level of expenses paid to ILCU board directors has provoked criticism. In defence, it is argued that the expenses are essential mainly for travelling on board business to meetings and conferences. A motion at the forthcoming agm calls for annual publication of all expenses, fees and benefits in kind awarded to ILCU directors and requests that these items be listed for each director individually."

Is IFSRA's Registrar of Credit Unions in operation yet to provide some transparency to members on issues such as this?
 
Re: .

If you want transparency, the first place to look for it is at your CU's AGM when they present the accounts.
 
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No - that will give no insight into monopolistic practices forced on the member unions by the central ILCU, ILCU director remuneration (sorry - expenses) and so on...
 
Re: .

Of course it will - your CU is a democratic organisation. Get up & speak at the AGM - propose a motion or two - If a majority of the members share your concern, then it will be actioned. Of course, if they don't share your concern....
 
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I received notice of my CU's AGM yesterday. The AGM was on last Thursday. They never issue proxy forms to allow non-attendees to vote.
 
Re: .

Looks like you have some problems in your local CU. My AGM invites always come a couple of weeks in advance. Unfortunately, I've never got round to attending myself. I trust you'll let them know of your dissatisfaction. AFAIK, the relevant legislation does not permit proxy voting for CU's.
 
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I trust you'll let them know of your dissatisfaction.
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No. I'll probably just leave as I get no benefit from membership to be honest. I saved a few bob years ago but never borrowed or bought any other financial product from them.

the relevant legislation does not permit proxy voting for CU's.
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Proxy votes are allowed accoding to the annual report. It's just that they don't send out proxy forms in advance of the meeting.
 
Re: .

Proxy votes are allowed accoding to the annual report. It's just that they don't send out proxy forms in advance of the meeting.
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From [broken link removed]

(3) Subject to subsection (4), a member of a credit union may not vote by proxy at a general meeting of the credit union.

(4) Where a member of a credit union is not a natural person, that member may be represented at a general meeting by a representative who may vote on behalf of the member if—

( a ) the representative is duly authorised in writing by the member to do so; and
( b ) the board of directors of the credit union have, expressly or by implication, accepted that authorisation;
and such a representative shall be entitled to exercise, on behalf of the member, the same powers as the member could exercise if the member were a natural person.
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So unless you can claim that you are not a 'natural person', they are correct in not sending you proxy forms.
 
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Item (2) in the AGM agenda was "accept proxies (if any)".
 
Re: Credit Union Borrowing

Hi Darag - You seem to be missing the point which Tedd made earlier that
being a mutual organisation, the CU IS the members - so what benefits
the CU does benefit the members.
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i simply don't agree, rainyday. just because something benefits the cu
as a whole doesn't necessarily mean it benefits an individual member.
if an individual ends up paying very high interest for their borrowings,
it certainly benefits the cu from a profits point of view but it hardly
benefits the member if they could have gotten money cheaper from a
different source.

i don't see how telling people that borrowing at a high rate while
saving at a low rate is financially prudent benefits the members who
take this advice. but i do see how it helps the cu's profits.
 
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