The new Registrar of Credit Unions in Ireland, Sharon Donnery, began her new job at the beginning of February having moved from the post of head of division within the Consumer Protection Directorate of the Central Bank of Ireland, which she joined as an economist in 1996.
The new Registrar of Credit Unions in Ireland, Sharon Donnery, began her new job at the beginning of February having moved from the post of head of division within the Consumer Protection Directorate of the Central Bank of Ireland, which she joined as an economist in 1996. She has taken over as registrar only weeks after the enactment of the first major overhaul of credit union legislation in Ireland in 15 years, and at a time when Ireland faces the multiple challenges of austerity, unemployment and emigration.
Ireland has long been a leader in the development of credit unions in Europe, and new legislation may now help the credit union movement to contribute to the economic recovery that Ireland so desperately needs.
The new act, which came into operation last December, contains over 60 recommendations by the Commission of Credit Unions and amends the Credit Union Acts of 1997 and 2001. It aims to improve governance, removes certain management functions from boards of directors, and provides a fund to be known as the Credit Union Fund. This fund provides for €25m to be distributed by the Government to credit unions, and the legislation also provides for a process of amalgamations and transfers.
The act aims to make credit unions more professional in their management and to tackle situations where credit unions are being run by long-serving cliques by limiting the period of office a director can serve; in future a director’s term will be limited to 12 years in aggregate in any 15-year period.
The Irish League of Credit Unions was established in 1960 and claims three million credit union members in the country. In the Republic the Central Bank of Ireland has overall responsibility for credit unions, with the Registrar of Credit Unions based at the Central Bank in Dublin. The league covers the whole of the island of Ireland but the North has been regulated by the Financial Service Authority of the UK since last March.
The first credit unions were launched in the 1950s when Ireland’s economy was depressed and urban poverty and emigration were increasing. The credit union movement was seen as a way to help people manage their finances.
Today, Ireland’s economy is similarly depressed. Ireland was among the first EU member states to suffer the effects of the global financial crisis, and there is real anger that the failure of bankers and their collaborators is being paid for by the public. Emigration from Ireland is at its highest levels since the Great Famine, and an average of 200 people a day left Ireland last year, with Britain, America, Australia, Canada, and New Zealand the top destinations.
Ireland has pioneered the development of credit unions in Europe, and the people of Ireland have shown the rest of Europe both that self-help banking works as an alternative to high street commercial banks which are owned by shareholders, and that credit unions owned by their members are good for individuals and the economy.
As Ireland takes on the presidency of the European Union on the 40th anniversary of the country’s entry into the EU, and as the country faces a historic economic crisis and large-scale emigration, a quiet revolution is taking place in the credit union sector which has the potential to contribute to the recovery of the Irish economy and set an example to 500 million citizens across the EU.
Michael McGowan is a former MEP and president of the Development Committee of the European Parliament.
