Monday, September 14, 2015


Credit unions, are a membership based, co-operative movement. Our mission is to deliver on the social dividend which the government says is at the core of its economic policy. In practice that means 352 credit unions, with in excess of 3 million members in every community in the country are prudently, compassionately, and accessibly making credit available to people who otherwise could not access it, or instead chose credit unions as their go-to community financial resource.

Families, small business, and people of modest means could not function, without credit unions. We are an ambitious, developmental movement with big plans to enable us play a much greater role in delivering affordable finance for housing and small business and modern payments technology. We are deeply engaged with Government through the Department of Social Protection in developing a new model for micro-finance that will enable credit unions deliver effectively in the future, as we once did in the past, on the pressing needs of those looking for very small loans of under €1,000. We are single mindedly focused on the much more we can do, if appropriately regulated, and allowed to do so.

Strong regulation is an essential, not an accessory, in a modern financial environment. Regulation, however, has to be for a purpose.  Clearly it must be prudential.  Our member’s savings must be safe, and all loans must be appropriately assessed and sensible. These are incontrovertible bottom lines, we strongly advocate for. As a movement, that is socially as well as economically orientated, we are fundamentally different from banks. We have members who are owners, not simply shareholders. The motivation behind our prudence with member’s savings, is to make those savings available as appropriate loans for a social purpose.

There is now a growing disconnect between the ethos of credit unions and that of our regulator, the Registry of Credit Unions, which sits within the Central Bank. That disconnect is highlighted again in the recent publication by the Central Bank of the ‘ICURN Central Bank of Ireland Peer Review Report – Central bank Performance of its Regulatory Functions in Relation to Credit Unions’. We note that the ICURN review team expressed concern at the sheer volume and complexity of the requirements with which credit union boards of directors and management must now comply. It is acutely frustrating therefore, that the views expressed on behalf of credit unions in relation to the overly onerous regulatory approach of the Central Bank have not been taken into account or acknowledged.

Regulation cannot be allowed serve simply as a defensive mechanism to protect a regulatory institution scarred by its own, recent failures. It must take those lessons on board and  enable development while simultaneously being prudent. Strongly defending prudent practice, while supporting the developmental social agenda credit unions were established to serve, are complementary not contradictory objectives. Regrettably for now, those two essential, complementary objectives remain at the heart of a regulatory dysfunction which is hampering credit unions, deliver prudently and appropriately for members’ needs.

You might well say, we would say that, and indeed we do. A pressing example of regulation that is hampering credit union s is the Central Banks Consultation Paper 88 (CP88). Again the evidence based concerns of credit unions were ignored. The new regulations, which impose further restrictions on credit unions, are a retrograde step. In enforcing restrictive, one-size-fits-all regulations, the Central Bank is regulating to a degree that ensures appropriate lending is severely restricted, and the financial fundamentals underpinning credit unions are eroded. These regulations place unwarranted restrictions on credit unions, and send out a message that may cause reputational damage to our movement. Most importantly, those that will suffer most are ordinary members – current and future. Notably, speaking in the Dáil on 24 June Minister of State Seán Sherlock stated during a comprehensive debate on credit unions that “the one size fits all regulatory regime being proposed by the Central Bank in Consultation Paper 88, is an exercise in suppressive regulation and micro-management”. There is in fact a wide political understanding, but as yet no effective action, in relation to the highly restrictive nature of credit union regulation.

The imposition of the regulations contained in CP88 is now dependent on the Minister for Finance signing a commencement order for the appropriate sections of the enabling legislation (being sections of the Credit Unions and Cooperation with Overseas Regulators Act, 2012).

What is at stake is the capacity of credit unions to contribute much more socially and economically to communities around the country. Vulnerable people are falling into the clutches of money lenders and paying exorbitant interest rates.  Families and small business are being prevented from accessing car loans, credit for a needed house renovation and seed capital. An exciting developmental agenda that would be a game-changer in terms of choice and access to credit provision is at the starting blocks, waiting to be actioned. Credit unions must be regulated. We also need willing partners who share our vision.

Monday, August 17, 2015



After a lot of hard work and a very nervous wait, 58,000 leaving certificate students around the country received their results this week. Students and their parents have invested a lot of time effort and energy to try and get the results they want, but that is not the end of the story by any means. Having done all of the hard work to earn their places, students need to find the funding to actually get them there.  It is just like buying your first car, you have it outside the door and you are dying to take it for a drive, but actually putting it on the road is a costly business.

In order to help us understand the difficulties that students were facing here at the Irish League of Credit Unions we commissioned some unique independent research to look at the cost associated with going to college.  We asked parents just how much it costs to send their children to college in Ireland. The results of this survey highlight the financial impact that college has on family spending and budgets as well as the challenges and concerns parents have in relation to finance, grants, living away from home and job prospects. The students were asked about working throughout the term, job prospects in Ireland, course choice and emigration.  The results are very similar to the stories that we hear across our counters in credit unions every year, which is why we place so much emphasis on ensuring that we provide very competitive loan rates and advice for families who are dealing with this particular expense.

Those parents who already have children in 3rd level education know only too well the financial challenges to be faced in the coming weeks, months and years. However, these students have spent the last couple of years focusing their attention on getting through the leaving cert, and have given little thought as to how they will fund life after secondary school. Luckily for them 94% of Irish parents are on hand to support their children with college related costs by contributing an average of €453 per month per child. 64% of parents said that family budgets have been adversely affected by the increased registration fees and 41% of parents find covering the costs of accommodation particularly stressful.

In terms of how parents cover the costs – not surprisingly the results show that monthly income and savings are the most popular way in which parents fund their child’s third level education, credit union loans are the next most popular method, followed by a bank loan. A huge 59% of parents expect to get into debt in order to finance the cost of third level education for their children. €5,030 is the average debt per child, per annum that parents will incur. Worryingly 10% of those considering borrowing have said that they consider a moneylender a viable option.

As for the students, in the aftermath of the celebrations comes the reality that they will soon leave the comfort of their family homes and go off in to the big bad world in search of student accommodation. Our research found that students living away from home are spending on average €1,033 per month on rent, transport, living and college related expenses. Students are paying an average of €380 in rent per month. As they will soon discover money does not grow on trees, and many of these young adults will find themselves in search of part time employment for the first time. The results show that 69% of students will work to fund or part fund college. Students are working an average of 26 hours per week, getting paid an average of €11.50 an hour.

The findings, particularly the financial realities facing parents and students, are stark. It is clear that students and their parents are experiencing very significant pressure in trying to fund third level education. The increased registration fees combined with monthly rent and bills, books and materials and day to day expenses are a significant financial burden to many families.

As always we would urge people to avoid moneylenders and talk to their local credit union first. Credit unions are available to support both parents and students as they prepare for the academic year. Some financial institutions try to attract students by offering short term gimmicks to open an account or offer an interest free period on a loan before a higher rate kicks in. This is not how credit unions operate. Credit unions offer loans at fair rates with flexibility to meet members’ needs. Each credit union sets its own interest rates and has its own loan criteria.  Your local credit union can give you details of their current interest rates.

We encourage anyone who is looking to finance their 3rd level education or who simply wants some advice on planning ahead or budgeting to call into their local credit union and speak to a member of staff.

Thursday, July 9, 2015

Back to School Research

School has only just broke up for the summer but many parents of school going children are already looking ahead towards the back to school shopping season. The cost of school going children to parents can be a significant financial burden and can put pressure on other areas of the family budget.  
This week, The ILCU published the results of the 2015 ‘Back to School’ spending survey, looking at just what the costs for both primary and secondary school children are. The results highlight the cost implications for families when funding back to school expenses and how they intend to covers these costs. The financial burden placed upon families at this time can be immense and credit unions around the country would like to work with their members to help them to manage what can be a challenging financial time.

The survey found that 81% of parents of school going children (primary & secondary) feel that the costs of sending their kids back to school is a significant financial burden. 32% of parents say they are likely to get themselves into debt to cover these costs. The average amount borrowed is €360. 

In terms of how parents cover the costs – the survey shows that monthly income is now the most common way in which parents pay for back to school supplies. 41% of parents will use their monthly income to cover the costs. This is followed by savings (25%), up from 21% in 2014. 12% use the back to school allowance and 20% will borrow money from a credit supplier (12% credit card, 5% credit union loan, 1% bank loan, 2% moneylender). Borrowing is most evident in parents of secondary school children, this group are also more likely to borrow from a moneylender.

In the survey, parents stated that they believe uniforms / school clothing are the most expensive items to purchase for their children going back to school. Parents of primary school children are spending an average of €166 per child on uniforms/ clothing, up from €160 in 2014. Secondary school parents are spending an average of €258 per child on uniforms/ clothing, down from €266 in 2014.Books are the second most expensive items on the list with parents of primary school children shelling out €106 on books, down slightly from €107 in 2014 and secondary school parents spending €213 on books, up significantly from €166 in 2014.School lunches have over taken extra-curricular activities as the third most expensive item on the list.

Dunnes Stores continues to be perceived as the best value for school clothing (23%). Marks & Spencer remains second (17%) and Tesco is considered the third most popular place (14%) for the best value school clothing.

The summer months should be a time for families to enjoy some quality time away together but 70% of parents have had to sacrifice their family holiday this year to cover the cost of sending their children back to school. Back to school expenses also have a negative impact on 29% of household bill payments, up from 26% in 2014. 

Worryingly, 16% will have to sacrifice spending on food to meet back to school expenses. 2% say they use a moneylender to pay for back to school costs, the survey found that 12% of all parents would consider a moneylender option to cover these costs. We would strongly urge people to avoid using these expensive sources of credit. Borrowing from high cost moneylenders can result in many getting trapped in a cycle of debt from which it is very hard to break free.

The survey also found that 49% of parents shop online for back to school items to avail of better value offers and many of the larger retailers. We would urge parents to shop around for the best value in back to school items like school books and uniforms.  We recommend that you check what you have left over from last year and then make a list of everything you need to buy and stick to that list.

From time to time throughout the year parents will also be asked to make voluntary contributions to  the school with 7 in 10 parents making a voluntary contribution amounting to an average €112 per child in 2015 (fall from €119 in 2014). Secondary schools are more likely to request voluntary contributions (77%) than primary schools (70%). Parents of secondary school children are required to pay higher contributions of €140 than parents of primary school children €82. Voluntary contributions across the board (primary & secondary) are down on 2014 figures.

Back to school season can be a very stressful time for parents who only want the best for their children. We want to let people know that credit unions are available to support parents and help them prepare for the academic year. Credit unions offer some of the most competitive personal loan rates on the market. We encourage anyone who is worried about Back to School expenses or who simply want some help on planning ahead or budgeting, to call into their local credit union and speak to a member of staff. At the credit union, we pride ourselves on doing things differently and ensuring that in everything we do, our members matter most.