Former Naas, now Life Credit Union
Credit unions have been in contact with the Central Bank to ensure capital requirements don’t hinder any help they may want to give to their members, a representative organisation has said.
Up to 100,000 members of credit unions affiliated to the Credit Union Development Association (CUDA), which represents 50 credit unions, will have their incomes hit by the crisis, the organisation said.
Calls to credit unions have quadrupled, according to CUDA.
Separately, the Irish League of Credit Unions welcomed news that the Government was considering credit unions as “an essential retail outlet.”
County Kildare credit unions have, however, scaled back operations to avoid person to person contact and are promoting online and phone contact.
Kevin Johnson, CEO of CUDA, said they anticipate that the incomes of up to 100,000 members will be immediately and severely hit by the crisis and as this crisis unfolds.
He said credit unions are staying true to their member-focused mission by encouraging members to get in touch if they are experiencing financial hardship, so that they can provide help on a case-by-case basis.
So far calls to credit unions are up by 400%, he said.
Mr Johnson said credit unions have a range of options in place for when borrowers experience difficulties such as reduced payments, interest only, payment freezes and loan extensions.
He said CUDA was in discussions with the Central Bank to ensure capital requirements don’t stifle any of the options that are in place. “We also want to ensure that borrowers are not penalised for missing loan payments, and that their long-term credit rating isn’t negatively affected.”
Mr Johnson said no-one knows how long crisis measures will have to be in place and it is difficult to quantify the full financial impact these measures will have on credit union members, the economy and indeed credit unions themselves. “So far calls to credit unions have increased by about 400%, with many calls from concerned members about their sudden loss of income and how they may be unable to meet some or all of their loan commitments.”
On March 24, the Irish League of Credit Unions (ILCU), which represents 226 credit unions welcomed the announcement by the government that credit unions are considered an ‘essential retail outlet’ in the ongoing fight against COVID-19.
ILCU CEO Ed Farrell welcomed the news. “Credit unions proved their collective resilience through the last economic downturn and they want to continue to provide financial services and support to their members at this difficult time. Members who are experiencing financial difficulties or who are anticipating that they may be facing into such difficulties in the coming weeks should make contact with their credit union immediately to discuss what arrangements can be put in place for them.”
Mr Farrell said that in the interests of social distancing, he would urge members to make contact by phone, email, or on line in the first instance and if a face to face meeting is required an appointment will be made by the credit union.
The ILCU currently represents 226 credit unions affiliated credit unions in the Republic, with total assets of €16.22 billion, and total savings of €13.55 billion. There are 3.16 million members of ILCU credit unions, and they have loans outstanding of €4.46 billion.