CREDIT UNION CONFIDENT IT WILL RIDE OUT STORM
Speaking to The Avondhu on Tuesday night, the treasurer of Mitchelstown Credit Union, Sean Casey was happy to report that the run on money following the article on Tuesday’s Irish Examiner was ‘significantly less’ than was the case last September.
“We were heartened by the amount of people who, having spoken with staff today both at the counter and over the phone, decided against withdrawing their savings. Members should realise that their credit union savings are guaranteed in two ways – by the Government guarantee scheme (on savings up to €100,000) and also by the ILCU (Irish League of Credit Unions)”.
Regarding the halt on commercial lending as dictated by the Financial Regulator, Mr Casey explained that Mitchelstown Credit Union is just one of many on whom this restriction has been placed.
“We are not alone in this. There are banks that have also been restricted but in the case of credit unions, the Regulator is insisting on us getting back to the ethos of the credit union movement, that is, the facilitating of members through personal lending.”
When asked how bad the restrictions might affect small loans such as people wishing to borrow for Communions, Confirmations etc., the treasurer said: “We are, as always, open for business and will be happy to help our members in whatever way we can. It goes without saying however, that the handing out of loans is dependent on the record of the individual member and their ability to repay.”
Can Mitchelstown Credit Union get out of this present bind? This question was posed to the union’s president, Mr Kevin O’Flynn who was emphatic in his response.
“There is no doubt in the world but that we can and we will, with the support of our many loyal members. Even today, while there were many people who came in to the office with the intention of withdrawing their money, we also had a number of members lodging to their savings account with some others making repayments on their loans,” the president said.
“We have been through this before and we are quite confident that we can meet the challenge. These are testing times for every credit union, bank and financial institution and we want to reassure our members that the new board, the supervisors and staff are working extremely hard on their behalf.”
Following on what the president had said, Sean Casey reiterated that much depends on members continuing to save money with their credit union. “This in turn, allows the credit union to lend money. That is why the support of members is so important in all this. It’s a local financial co-operative – when we get money in from members, then we can give it out in loans.
Quoting from the Financial Regulator’s letter to the board, Tuesday’s Irish Examiner stated that “four of the top five loans at Mitchelstown Credit Union were in arrears” and also that three loans in the region of €250,000 were advanced without the knowledge of the board.
This however is not the case as the treasurer, Sean Casey explains: “We can confirm that, contrary to newspaper reports, the credit committee is fully aware of all loans passed and we can further confirm that the top four loans are not in arrears as was stated in the Irish Examiner. This came about as the result of a mix up in communication between ourselves and the registrar’s office.”
Concluding, Mr Casey emphasised again the importance for members to continue their allegiance to Mitchelstown Credit Union.
“I can categorically assure them that there are no financial irregularities whatsoever, or no financial pressure. But we do need their support and the best way they can do that is by ‘money in’ (savings and loan repayments) and ‘money out’ (loans).”
NEW MANAGER AND LOSSES ON INVESTMENTS
Regarding the appointment of a manager to Mitchelstown Credit Union, it now looks as if the position will have to be re-advertised, as was explained to The Avondhu by the president, Kevin O’Flynn on Tuesday.
“Both the board and the registrar are now in agreement that the appointee must be a qualified accountant and a member of a recognised accountancy body with the relevant experience for the position.”
The registrar, Mr Brendan Logue had stated that the appointment of a new manager had ‘fallen into confusion’ arising from ‘disputes between directors as to the proper procedure to be adopted’.
“Now that we are all more clear on that, we have to get on with the business of securing the right person for the job in the shortest possible time”.
Speaking on losses on investments, the president pointed out that while losses could hit €4.6 million by the end of this year (on investments totaling €65 million), the figure still only reflects an approximate 7% of a loss.
“Losses on investments are being experienced in financial circles everywhere and there are many, I am sure, that would be very glad to report that their losses were only 7%. However, it is important to point out and to assure our members that all their investments are capital guaranteed,” Mr O’Flynn concluded.
Thursday 5th March 5:56pm