Credit Unions

 

A few days ago, I published my thoughts on the Death of the Post Offices in the UK. Whilst checking if my blog was fully integrated into Google, I found this interesting piece in praise of Credit Unions.

There are 427 credit unions affiliated to the league. They provide an unparalleled level of financially based, user friendly services to people in [51] all parts of the country. Travelling through Ireland one can see towns which have been abandoned by the banking industry and experienced the death of post offices but still remain cores of credit union activity.

The service provided by the credit union movement is unique. First, it is community based, which is extraordinary in the days of crass commercialism. Second, it is not fundamentally focused on profit. Service is the objective rather than the bottom line. This is something which privately and publicly owned banks cannot compete with. Third, an extraordinary level of voluntarism is still based in the credit union movement. It is extraordinary to look at the scale and level of service provided by credit unions when one considers the backbone of that movement is voluntarism.

There is another aspect of the credit union movement I find praiseworthy and which is an essential element in its success. The credit union service is not in any way elitist. It is user friendly, a character exemplified by a sense of neighbourliness. It serves people who would not use banks.

Credit unions also encourage frugality, which is sometimes considered conservative but which is praiseworthy. In particular, it encourages frugality among people on low incomes who do not necessarily have a high propensity to save. This helps people regulate their financial affairs in a way none of the commercial banking services does.

Credit unions provide a valuable service to young and old people. Young people are encouraged to become involved in the movement, partly through the positive attitude taken by credit unions to younger people in comparison with that of banks or commercially oriented bodies. In particular, I welcome the service credit unions provide for the elderly, especially those in rural communities. The movement is trusted by these people. They feel unthreatened by their credit unions and they are encouraged to deposit savings with them rather than hold income at home. The credit union fulfils a very important social function which other financial services are not fulfilling.

Banks have often abandoned rural areas and too often we have seen the demise of post offices. In many parts of the country credit unions provide the only available financial services.

One aspect of credit unions in recent years which we all celebrate is the monetary advice and budgetary service. This is a very valuable service, particularly for those who in the past found money lenders, who operated usurious rates with ruinous effects on the lives of people, were their only recourse in times of difficulty. Credit unions, with the support of Government and other social agencies, have stepped into a major gap which emerged in recent years. All members of credit unions are entitled to our compliments and gratitude for doing this.

This was from a debate in the Irish Parliament about the second stage of the Credit Union Bill. In 1997!

Can I believe that our thinking on providing financial services is so far behind, as the effect of Credit Unions in the UK has been minimal?