Arrears Rise 23% Among Credit Union Members
Arrears among credit union members rose 23 per cent to €813 million in the nine months to June 2011, as borrowers and credit unions alike felt the impact of long-term unemployment and economic austerity, the Irish Times reported. Figures from the Irish League of Credit Unions, which represents 496 credit unions in Ireland, show that some 14 per cent of outstanding loans are more than 10 weeks in arrears. The league’s chief executive, Kieron Brennan, said it would be difficult to predict the pattern of arrears in the year ahead. “It depends where the national economy goes. With three million members, the credit unions are very reflective of the national picture.” He said it shouldn’t be surprising that there has been an increase in the rate at which credit unions have taken legal action against borrowers with unpaid debts. Figures from business information service Vision-net published earlier this week show a 13 per cent rise in such cases in 2011 compared to 2010. “In these difficult times, we are pleased to see credit unions taking a greater duty of care, because it is the members’ money,” Mr Brennan said. Reserves held by credit unions have increased from €1.7 billion to €1.86 billion and now stand at 13.45 per cent of assets, up from 12.7 per cent in June 2010. This places the credit unions ahead of the regulator target of a 10 per cent reserve rate by 2013. Provisions for bad and doubtful debts have also increased to 12.2 per cent of the loan book, up from 8.4 per cent in 2010. Read more.