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Credit unions restricted in
lending
24.10.11
by Eamonn Mac Dermott, Inishowen Independent
LENDING restrictions being placed on some credit
unions run contrary to the “ethos of the
organization”, the treasurer of Foyle Credit Union
in Moville has said.
Brian Barr was speaking after restrictions were
placed on many credit unions by the Registrar of
Credit Unions that will govern how much they can
lend to members.
Under the new regulations even long term members of
good standing could find difficulty in securing
loans.
Mr Barr who is also the treasurer of Chapter 1 of
the Irish League of Credit Union said: “Foyle Credit
Union, which comprises Moville and Muff, is one of
the few not to have any restrictions placed on us
but even we have to be more cautious when it comes
to lending.
“In the current climate we can no longer give out
loans the way we used to.” |
Under the new
regulations some credit unions would be restricted
to handing out loans of no more than €500 to €1,000
which would be a move away from the original ethos
of the movement which usually worked on the
principle that a member could borrow two or three
times their savings.
Brian Barr added: “We have never been and we would
never aspire to be anything like a bank but these
regulations almost force us into a banking attitude.
“We are now facing situations where if someone
applies for a large loan they may not get it
regardless of how much they have in their savings.
“When the new regulations were being debated in the
Dáil this week we successfully lobbied for some
changes. |
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Brian Barr. |
“But ultimately these
new regulations will hit the less well off the
hardest. People who would have borrowed to help
their children through college may find they are
unable to do so.”
He also urged all members who may find themselves in
trouble financially to keep in contact with their
branch to find out what can be done to help them.
During the debate on the new regulations in the Dáil
Sinn Féin TD Pearse Doherty described them as “blunt
instrument that will push families into the hands of
money lenders”.
Deputy Doherty said: “More than 50% of credit unions
across the state have had lending restrictions
imposed on them by the Registrar of Credit Unions.
“As a consequence, financially sound credit unions
are unable to extend loans to long-standing
customers who, in the view of their local credit
union manager, should be granted a loan." |
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