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Will a credit union expansion fill the banking void?

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Rebecca Kincade on March 13, 2014 - 6:45 am in Featured Interview, Interviews

As the Northern Ireland Assembly backs plans to expand credit union services, spokesperson for the Irish League of Credit Unions, Rosemary O’Doherty, told Rebecca Kincade about their plans to fill the void left by wholesale bank closures.

How important was the recent Assembly decision?

According to the Consumer Council 53 bank branches have closed in Northern Ireland in the past two years alone, with rural areas being hit especially hard, and there are now vast swathes of Northern Ireland with no access to bank branches. We have known for a while that something needed to be done to manage this situation and credit unions are in a great position to be able to fill the gaps.

Why are bank branches closing?

It appears to be a cost saving move on the part of the banks. The big banks are trying to replace personal with online services even though that does not suit many customers. At a time when the standing of the banks has fallen to an all-time low, our reputation with local people is at unparalleled levels.

How will your model differ?

We are owned by our members so we want to be able to serve them. This means that we want people to be able to come in and use our facilities. We don’t want to be remote. A significant network of credit unions currently exists, spread throughout the province, with the ILCU’s 97 credit unions represented in 136 locations. Credit unions are locally focused, not for profit organisations which exist for the benefit of members and are run for a social mission, rather than for the benefit of shareholders and the Stock Market.

What additional services do you hope to provide?

We are hoping to expand our service to include current accounts and card access, completing our offer of full viable, secure banking alternative for the communities that we serve. Funding is in place to make this happen in England, Scotland and Wales, but due to a disparity in legislation, financial support for such a scheme is not currently available here. In today’s challengingly austere economic climate we simply cannot afford for Northern Ireland to be left behind.

So what does this recent move actually mean?

The backing given by members of the Assembly has been a huge vote of confidence. They obviously feel that this is a good idea and that it is a necessary move to help ordinary people in Northern Ireland.

What is the next step?

We are asking for the immediate attention of the Executive to identify suitable income streams from which to finance the project. The package required is for £4.3 million over 5 years, just over £860,000 per year. This will enable 75 credit unions to expand their services, allowing each to offer full current accounts with card access and thus provide a comprehensive alternative to managing money with the banks. We are currently in talks with several departments that we feel could benefit.

Where did this idea to expand come from?

We have a group called the NI Committee and this is made up of credit unions from rural and urban areas. It was the rural members that brought the idea to our attention as they recognised the need as it developed. Knowing what our members want is what guides us.

Why is the percentage of credit union membership higher in NI compared to the rest of the UK?

In Great Britain the penetration of credit union membership is only 5%, whereas it is 34% in Northern Ireland. We have been in existence for longer and worked from the ground up within our communities. We know that it may take bank customers a while to move away and change from something they are comfortable with but we can tell that the demand is out there.

Where can people go to find out more information?

They can talk to anyone in their local credit union or visit the website: www.creditunion.ie.


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