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Credit unions may need major restructuring

The registrar of Credit Unions says some will not survive the downturn.

Matthew Elderfield, The Financial Regulator.
Matthew Elderfield, The Financial Regulator.

THE FINANCIAL REGULATOR has warned credit unions that a major restructuring plan may be on the cards if arrears continue to rise and lending opportunities remain subdued, RTÉ reports.

Reuters reports that because Ireland’s credit unions “lent aggressively” during the Celtic Tiger years they were now struggling.

Speaking at the National Supervisors Forum, the registrar of credit unions James O’Brien said:

Not all credit unions will make it through this difficult financial and economic environment in their current structure.

The subject of ‘restructuring’ within the credit union sector must now be put firmly on the table for open and considered discussion.

O’Brien added that more credit unions will come under pressure and that it would be vital to take preemptive measures to restructure, in order to “protect members’ funds and the maintenance of the financial stability and well-being of credit unions generally”.

Last month, the Financial Regulator Matthew Elderfield said that said the country’s credit unions were under-provisioned on their loans by an average of 40 per cent.

Credit unions hold savings of €11.9bn. Across the state, 2.9 million people are members of a credit union.

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