Dear Editor,
It is undeniable that the initial architects of the credit union movement deserve praise. However, it’s imperative to acknowledge that the contemporary credit unions are dramatically distinct from their 20th-century equivalent.
Letters published on August 24th, 26th and September 2nd, interestingly, chose to overlook the clear decline in the quantity of credit unions operable in Ireland since 2008, nor did they attempt to address the factors behind this downturn.
One of the significant reasons behind the disappearance of numerous credit unions was attributed to enforced mergers due to inferior loan practices during the Celtic Tiger era. These unfortunate decisions were made during a period when these unions were incapable of issuing mortgages, thus they were not directly affected by the housing crisis. However, they still required a rescue operation.
These credit unions operated with the same philosophy as today’s, strictly non-profit and dedicated to serving their local communities through loans. Nevertheless, despite the significant emphasis on local connections and inherent community knowledge, many still found themselves making disastrous lending decisions. This undermined their financial stability leading to eventual dissolution.
Furthermore, a detailed public discourse regarding the errors and consequences of the credit unions that have vanished has rarely been conducted. On numerous occasions, the regular members were never provided with comprehensive accounts of their credit unions’ final years prior to absorption.
It is also worth noting that the credit union movement has never accepted responsibility the way the banks were rightfully made to do. This doesn’t mirror a sector that has effectively learnt from its past mistakes or a sector that should be encouraged to deepen its involvement in the housing market.
Sincerely,
Daniel K Sullivan,
Marino,
Dublin 3.