Brian O`Driscoll launched as face of Credit Unions

Transcription

Win a Weekend Away to London! Flights & Hotel!
Credit Union Focus
Profiling Derry Credit Union
Brian O’Driscoll Interview
Focus on Ireland’s Rugby Superstar
Word of Mouth Marketing
Member Referral
The magazine of the Irish League of Credit Unions – Winter 2009
The Gift of Life
Joe Duffy Show
The Power
of Local Radio
The Cost of
Celebrating
Christmas
Brian O’Driscoll
launched as face
of Credit Unions
ILCUnet – The Secure Connection
A network for Credit Unions
C U F O C U S w i nt e r 2 0 0 9
Editorial
4
“Never lose the opportunity afforded by a crisis” it is said
– and we are certainly in a crisis! In fact, many members are
now deep in the mire and any wriggling around only seems
to get us in deeper. It is no consolation to state that credit
unions didn’t get the Irish people into the crisis – the greed
and recklessness of some bankers, developers and speculators
is now all too apparent.
But is it possible that convinced co-operators can offer
people (at least) a signpost, or (better still) some practical
examples of hope for a better future?
Some members may be unaware – or have forgotten if
they ever knew – that credit unions are financial co-operatives, “owned and run by the members for their mutual
benefit”.
Many of us are passionate about our own financial coops – that we call ‘credit union’ – but it’s interesting that
other people, including some media are now waking up to
the merit of potential of co-ops. Indeed, given what co-ops
have to offer, we might wonder why it has taken a banking
crisis, followed by a global economic recession, with misery
for millions of ordinary people, to bring co-ops to media
attention. Nonetheless, I think we would all accept that
we have been less effective than we could in promoting our
credit union /financial co-operative option – especially to
non-members and particularly to young people. That needs
remedy; and no better time than now.
Co-ops are not the answer to everything, but they do offer
a viable alternative way to do business – and to live our lives.
The financial crisis has clearly demonstrated both scope and
need for different business ideas to be considered and to coexist. Surely there can be no better time than now to begin
to address that need? The current recession and the loss of
faith in banks and big businesses should provide us with an
excellent opportunity to promote the co-operative option—to
members and non-members alike. We need to seize the moment and promote both our ethos and the positive benefits
that co-ops bring to any community. We need to work harder
to inspire people to consider the benefits of the co-operative
option: where people matter more than profit.
So what makes co-operatives different?
Many years ago, the Rev, Maurice Dineen, a co-operative
pioneer wrote: “By its suppression of the profit motive, co-ops
tend to suppress exploitation of man by man. No co-op can
call itself such and set out ruthlessly to destroy (or exploit)
fellow human beings. A co-op must have eyes—to see the
needs of people everywhere. It must have ears—to hear the
cries for justice from home to home, from nation to nation
and from ocean to ocean”. And I would add that it must
have a heart; that feels the need to give generously, of time
and expertise, to serve fellow members.
You are the beating heart of credit unions—financial
co-ops—in Ireland today; giving people access to credit
with dignity. You show the co-op difference daily in your
credit union.
We can argue justifiably that co-ops can help restore a
sense of trust in business and finance. Co-ops exist primarily
to meet their members’ needs; and it is the members who
benefit when the co-op is successful.
When other financial business models are suffering a crisis
in public confidence unparalleled in recent times, co-operatives, which enjoy widespread levels of public trust, could
help rebuild confidence in the economy and the financial
sector – whether at local, regional or at national level. Other
approaches will no doubt play a role in the future too; but
as well as deserving greater attention, co-operatives offer
important lessons for business and perhaps another way
to rebuild our struggling economy. This is a good time to
promote and reconsider the co-operative model and the
tangible benefits it can bring to communities, employees and
members alike. Profit for Profits’ sake is part of the problem
– not part of the solution!
Contents
8
14
16
20
4
7
8
10
12
14
16
18
20
21
22
24
26
28
30
Interview – Brian O’Driscoll
European Network of CUs
Credit Union Profile – Focus on Derry CU
The Price of Celebrating Christmas
Credit Unions in New Zealand
ILCUnet – The Secure Connection
Leveraging the Power of Local Radio
National Advertising Campaign
Schools Quiz Launch
The Gift of Life
ILCU Foundation Update
Word of Mouth Marketing
ACCUP Update
HR Update
Youth Update
32
34
35
News Round Up
Legislative Update NI
Legislative Update ROI
ILCU Financial Data Review Winter 2009
36 Summary
37 Interest Rates
37 Credit Markets
38 Credit Union Rates
40 Savings Market
42 Commentary
43
Competition
Cover photo shows Brian O’Driscoll,
the new face of Credit Unions in Ireland.
Editorial Committee: Pat Fay, Kevin Helferty, Brian McCrory. Volume 1, Issue 14 ©ILCU ISSN 1649-377X. League Board: Mark Bailey President. Jimmy Johnstone Vice President. Rosemary O’Doherty Treasurer. Nick Cashin, Michael
Dowd, Gerald du Bois, Pat Fay, John Long, Noel Madden, Brian McCrory, Gerry McGee, John Mullen, Con O’Brien Supervisory Committee: Fintan Boggan, David Florida-James, Jim O’Connell Life Director: John Hume Senior Management Staff:
Kieron Brennan CEO. Fiona Cullen Head of Legal and Secretariat. Tom Kiely Head of Monitoring. Brian Mulholland Head of Insurance Services. Ed Farrell Head of Finance. Mandy Johnston Head of Communications, Marketing and PR. Charles McLaughlin Head of IT.
Designed by BFK. Please Note: The deadline for copy and photos for the next issue of CU Focus is 29th January 2010. Please mark for the attention of the editor, CU Focus Marketing Department. The views expressed in this issue of the CU Focus are
not necessarily the views of the Irish League of Credit Unions. Advertising: The placement of an advert does not imply endorsement of the product or service advertised, either by the magazine or its publisher. The CU Focus will not knowingly carry
false or misleading advertising. Articles The CU Focus would like to hear your news and views. Send in any newsworthy stories or photos. The CU Focus tries to publish all appropriate information submitted, but may be precluded by space constraints.
Published By Irish League of Credit Unions 33 – 41 Lower Mount Street Dublin 2 Tel: 353 (0)1 614 6700 Fax: 353 (0)1 614 6701 Email: [email protected] Website: www.creditunion.ie
C U F O C U S w in t er 2009
An Interview with
Brian O’Driscoll
In September 2009, Brian O’Driscoll was announced
as the new ambassador for credit unions in Ireland. Over
the coming year Brian will be working with the ILCU to
promote both credit unions and credit union initiatives
across Ireland. This association will seek to highlight
the very significant contribution that credit unions make
in local communities at every level. In particular, the
campaign will highlight the ongoing youth initiatives which
are run by credit unions nationwide, including school credit
unions, scholarships and bursaries. In addition Brian will
be attending a number of pre-agreed credit union events
around the country and is featuring as part of the next
phase of ‘CU at Your Place’ advertising campaign.
Brian, you’re recently been unveiled as the new
face of credit unions in Ireland. How familiar
are you with the credit union movement? Are
there any aspects which are of particular interest/relevance to you?
I really like the community element of credit
unions. That ethos which sets credit unions apart
from other financial institutions is something I
think will appeal to people in these challenging
times when so many have been disillusioned
and are feeling the effects of the credit crunch.
I also like credit unions initiatives aimed at children, the savings schemes, Schools Quiz, Poster
Competition etc. It is very important to involve
children from an early age in believing that their
community matters so that they will learn from
an early age that there is strength in unity.
What is your local credit union?
I am a member of Dundrum Credit Union
Limited.
2009 has been quite a year for you! Captaining the
winning grand slam team, winning the Heineken
Cup, top try scorer in the Heineken Cup, joint top
try scorer of the Six Nations, player of the tournament in the Six Nations and Players’ Player of the
Year. Is it a monkey off your back to have finally
won the Grand Slam with Ireland after knocking on
the door for so long? Is there any ambition that you
have not yet fulfilled?
No, not really. I am thrilled to have won both
the Grand Slam and the Heineken Cup after so
many years of hard work and disappointment but
my ambition would be to repeat these achievements
in the future.
The media make much of the rivalry with Munster.
How intense is the rivalry given that you know most
of the players through the Irish setup? Is it difficult
to ‘go to war’ with Munster one week and to line
up beside the same players a week later?
Forget the media, the rivalry is phenomenal and we
love the challenge. Winning is everything and we
love to go to war with each other. There’s no problem playing with them a week later, especially after
a Leinster victory!
Do you feel we are in the golden age of Irish rugby?
Are our underage structures sufficient to bring through
the calibre of player required to keep us right at the
top? Are you confident that quality players will conWhat about the Heineken Cup success with Leinster? tinue to come through to senior level to keep Ireland
We heard Jonathon Sexton’s half time comment in and indeed the provinces at our current high level?
the final that at that stage, he believed it was “fate”. There is a lot of work going on at under-age level, and
At what stage did you personally think it could this has improved substantially over the years. The
be Leinster’s year? Were there any key differences academy structures work very well in the provinces
between 2009 and other years when Leinster came where players come through the academy first and
up short?
then get full senior contracts. It usually takes a few
When Jonno kicked the last penalty in Edinburgh, years and they don’t throw young players into senior
then I felt it could be Leinster’s year. We had a rugby too early. Luke Fitzgerald is an example of a
terrific squad with some new players in key positions, player who went straight from school to the senior
top class guys with Rocky outstanding. While we Leinster panel but he is one of the exceptions.
had a little luck on our side this year, the competition for places was probably the key difference from How has your game changed since you first burst on
other years.
the scene with Ireland by scoring that memorable
hat-trick against the French in Paris?
Experience is the key, you can’t just buy it. You
concentrate on doing the simple things well and
anything else is a bonus.
“ I really like the community
element of credit unions. That
ethos which sets credit unions apart
from other financial institutions
is something I think will appeal
to people in these challenging
times when so many have been
disillusioned and are feeling the
effects of the credit crunch”
Backs in professional rugby now weigh as much as
forwards did in the old days. What kind of toll has
professional rugby placed on you physically? Is the
physicality required to play the game higher than Your engagement to Amy has thrust you further into
ever before?
the media spotlight if that is possible? Do you accept
It has definitely taken its toll but happily I am that this media attention is inevitable or do you resent
still able to compete at the required level. The mod- the intrusion into your private life?
ern training techniques prepare us for the physical A professional sports man will always attract media
needs of professional rugby. Without this prepara- attention but I do wish that my private life is my
tion careers would be much shorter and the game own and remains so.
less challenging.
Have you made plans for your life after rugby or
Who was your sporting hero growing up and what is this something you will address when the time
sports did you play?
comes?
Mark Hughes, the ex Manchester United striker and I have several things in mind and hope to develop
current Manchester City manager, was a real favourite these as time goes by.
of mine. I played a lot of sports as a youngster but
the main ones were Gaelic, soccer, golf and rugby. I We were certainly impressed with your recent adage
first started playing rugby when I was eleven.
that ‘Knowledge is knowing that a tomato is a fruit;
wisdom is knowing not to put it in a fruit salad’. Any
What are your sporting goals for the coming year?
more ‘nuggets’ for us?
A repeat of 2009 would do quite nicely!
I think the best response to that is an Irish proverb
‘Is binn béal ina thost’ (Silence is golden).
Do you find it hard to switch off after training or is
the life of a professional sportsman 24/7?
Final question, why did you choose to continue playI have no problem switching off at all. I give every- ing in Ireland? As one of the biggest names in world
thing I have when I’m on the pitch and try to forget rugby, you surely could have left for bigger money in
about it once I’m off it. I enjoy being at home and France or England. What is it that kept you here?
spending time with my family.
The supporters, the lads and Charlie McCreevy!!
Launch of
European
Network
New Group
to Support CU
Development
throughout
European Union
Six European credit union organisations
ongoing global economic crisis. Credit
The Network has been working hard to
and World Council of Credit Unions
unions have an important role to play
educate MEPs, the EU Commission and
(WOCCU) have launched the Euroin maintaining economic stability, espepolicymakers in Europe on the unique
pean Network of Credit Unions. The
cially on behalf of their members, the
ethos, structure and critical role of credit
network will serve as a platform for
speakers said.
unions and the ILCU will continue to be
the exchange of information among
“In analyzing the causes of the fiat the forefront of these efforts”.
member organisations and will speak
nancial crisis, it is clear one of the focal
In addition to WOCCU and NACin a unified voice on issues that affect
points has been the provision of unsusSCU, WOCCU member groups that
European credit unions.
tainable credit“ said Bierecki. “Credit
participate in the network include the
The network convened its first meeting
unions have not been involved in the
Association of British Credit Unions,
dedicated to presentations on responsisubprime market in the European Union.
Ltd. (ABCUL); the Central Federation
ble lending held at the Altiero Spinelli
Instead, credit unions have operated with
of Romanian Credit Unions (FEDCAR);
Building of the European Parliament in
sound regulatory and internal standards
the Estonian Union of Credit CooperaBrussels. European Parliament members
in place that guarantee responsible lendtives (EUCC); the Irish League of Credit
Marian Harkin, Ireland, and Jacek Kuring to members.”
Unions (ILCU); and the Macedonia’s
ski, Poland, co-hosted the event.
Con O’Brien, ILCU Board Director
FULM Savings House. The six Euro“For the past five years we have been
outlined the important role which the
pean organisations represent more than
working together to create a greater
European Network of Credit Unions
1,000 credit unions serving 5.5 million
awareness of the contributions credit
will play at EU level:
members.
unions make to the European Union,”
“At a time of increased regulation of
For more information on the network,
said Dave Grace, WOCCU vice president
credit unions at national level, we must
its goals and objectives, please visit
of association services who also serves as
be aware that legislation emanating from
www.creditunionnetwork.eu.
the network’s vice president. “This is a
the EU is increasingly impacting on the
historic day for European credit unions
credit union movement. The European
because the network will strengthen
Network of Credit Unions is an ideal
the role credit unions play in providing
platform to ensure the interests of credit
important financial service alternatives
union members throughout Europe are
to European citizens.”
represented at the highest level within
More than 40 people attended the
the EU.
breakfast meeting, including 14 members of the European Parliament, four Pictured at the launch were Con O’Brien, ILCU Board, Mairead McGuinness MEP, Fiona Cullen,
members of the European Commission Head of Legal and Secretariat, ILCU, Marian Harkin, MEP and Brian McCrory, ILCU Board.
and three from the Council of Ministers.
Speaking on the topic of responsible
lending were Grzegorz Bierecki, second
vice chairman of WOCCU’s board of
directors and president of the National
Association of Cooperative Savings &
Credit Unions (NACSCU), WOCCU’s
member organisation in Poland; and
Mick McAteer, director of the United
Kingdom’s Financial Inclusion Centre, an
independent research and policy innovation think-tank dedicated to promoting
fair, affordable financial services and an
efficient, accountable financial system.
Both speakers stressed the importance of operating with sound lending practices, especially in light of the
Credit Union Profile
Focus on
Derry CU
Derry Credit Union Limited was founded on 16
October 1960, in the home of Paddy ‘Bogside’ Doherty, by
Paddy himself, George Coyle, Seamus Bonner, Paddy Joe
Doherty and John Hume. The five founding members, all
young men in their 20’s, had the foresight to recognise that
the credit union provided an ideal solution to the lack of fair
and reasonable rates of credit available to the ordinary borrower. Those in need of a loan prior to this had to resort to
money lenders, who were notorious for charging exorbitant
rates of interest.
The founding members knew and understood their
city and the needs of its people. They wisely recruited individuals who were trusted by the people
to become volunteers and directors. Derry Credit
Union Limited rapidly became the fastest growing
credit union in Ireland, and in 1972 was the largest
community based credit union in the world. Derry
Credit Union Limited also assisted in establishing
the other two main credit unions in the city – Pennyburn Credit Union Limited and Waterside Credit
Union Limited – and today remains the largest in
Northern Ireland.
Over the past 50 years, the credit union has
introduced a variety of additional services to meet
the growing needs of our members.
We provide a free Money Management Service.
Two full-time Money Management Counsellors on
our staff meet privately with members experiencing
financial difficulties, working with them to develop
a realistic budget, and assisting them in dealing
with other creditors. Such meetings are a golden
opportunity for us to help educate our members
in the wise management of their money.
Our Foreign Exchange Service is very competitive. Members taking out loans for holidays abroad
can also exchange their money into the appropriate
currency.
An ATM was installed outside our main entrance
last year. Members can now withdraw money from
the ATM to lodge as shares or repay their loan. An
increasing number of members (and non-members)
have been using the ATM each month.
Our website not only keeps members up-to-date
Fact sheet Section
Total number of members
Adult Minor savers 28,169
6,062
Total Savings (m)
£68,086,632.71
Total Assets £80,382,954.00
Number of Staff
54
Number of Volunteers 44
with our products, services and news, it also features
a members section that allows members to log in to
view their account balances and their most recent
transactions. Because we offer a service that allows
members to lodge shares and repay their loans via
standing order, members can apply for their loan,
repay it and keep an eye on their account without
ever leaving the comfort of their own home.
We also visit local schools, housing associations
and community groups to give educational talks.
Talks are tailored to suit the specific needs of the
group, but normally include a presentation that gives
a broad background to the credit union movement,
information about our products and services, and
wise personal financial management.
Derry Credit Union Limited offers two school
credit union programmes, both of which were
established to encourage youngsters to develop
the saving habit: Kidz Count at the primary level
and Makin’ Change at the secondary level. Both
programmes have grown in size and popularity
since we initiated them three years ago. Pupils at
participating schools may save £1 a week at primary
level and £2 a week at the secondary level.
Derry Credit Union Youth Committee
Our Youth Committee is open to minor depositor’s
aged from 11–18. We model the committee on
our Board of Directors. Therefore, we have fifteen
members and they elect their officer board each
October – Chairperson, Vice Chairperson, Secretary,
Treasurer and Public Relations Officer. Once a year
we hold a brief workshop on the credit union and
also on how committees work and the purpose of
an agenda, minutes, voting, etc. We hope that by
encouraging the youngsters to run their meetings
in this official manner, they will gain experiences
and skills that will serve them well in future when
they sit on other committees and boards.
While our youth committee assists with various
annual events organised by Derry Credit Union
such as the poster competition and schools quiz,
they have initiated their own projects too. They
produce a newsletter for young savers, have hosted
Derry Credit Union in
the early days
Derry Youth Committee
a public speaking competition, assisted with this
year’s Chapter 1 CU Factor Competition and have
hosted visits by other youth committees.
The highest profile project they are involved in,
however, is their annual Young People’s Awards.
Begun five years ago, this awards ceremony has
gone from strength to strength. The purpose behind
the scheme is to promote the good things young
people are doing and the positive contribution
they make to their families, schools, communities
and wider city. Young people are nominated for
an award in one of seven categories: Contribution
to the Arts, Business and Entrepreneurship, Carer,
Community Service, Leadership, Overcoming
Adversity and Contribution to Sport. Each year
we receive around 50 nominations.
All nominees and their guests are invited to an
awards ceremony, along with nominators, school
principals, coaches, etc. Our Youth Committee
host and deliver the entire event.
Derry Credit Union participated in the For Service,
For All project. Tell us a bit about the initiative.
As a result of participating in the League’s For
Service, For All project, we instituted a number
of changes and improvements to ensure all our
members can fully and easily avail of our services,
products and premises. These included modifying one of our entrances to include a ramp and
automatic doors for members in wheelchairs or
pushing prams and strollers; purchasing a miniloop system and Quick Look magnifier to ensure
Derry Credit Union today
members with sight or hearing difficulties could
fully understand their loan agreements, etc.;
improving our signage so that departments were
more easily found; inviting a signer to attend our
AGM for members with hearing difficulties; and
training staff in serving members with special
needs. The training element was particularly
beneficial as it had not occurred to many of our
staff that the elderly member, for example, who
becomes confused or forgetful may not show any
outward signs of disability yet requires extra care
and attention nonetheless.
Fifty years ago, the majority of people in Derry
had to scrape by (or do without) and had little
hope of bettering their quality of life or that of
their children. With the establishment of Derry
Credit Union Limited, and Pennyburn Credit Union Limited and Waterside Credit Union Limited
after that, the ordinary person in Derry had access
to fair and reasonable rates of credit. Credit union shares and a loan from the credit union gave
those first members confidence. They knew the
credit union trusted them and considered them to
be a good risk. They had money in their pocket
and they were determined to make the most of
the opportunities that money presented. This
attitude was handed down from parent to child,
and we are now serving the grandchildren of
those founding members. Financially empowering
this multi-generational membership is one of our
proudest achievements.
The Price of
Celebrating
Christmas
A recent survey on the cost of Christmas
confirmed that Ireland had surrendered
its place at the top of Europe’s Christmas
spending chart to Luxembourg and reported
that we will spend an average of 22 per cent
less on Christmas compared with last year.
Conor Pope
10
A recent survey on the cost of Christmas confirmed
that Ireland had surrendered its place at the top
of Europe’s Christmas spending chart to Luxembourg and reported that we will spend an average
of 22 per cent less on Christmas compared with
last year.
That does not however mean it’s going to be
cheap. Each household will spend an average of
around €1,110 over the festive season as, despite
the downturn, people are as anxious as ever to
make Christmas special for their families.
With most of us having less to spend this year,
it is unsurprising that presents are set to take the
biggest hit – households will spend €660 on gifts
down 30 per cent on 2008. Food will set us back
an average of €265, just six per cent less than last
year, while households will spend €185 on socialising – down nearly 22 per cent on last year.
One striking statistic which emerged from the
survey, which was carried out by Deloitte, suggested that 61 per cent of consumers will draw up
a budget for their Christmas shopping this year,
many of them for the very first time. It is a smart
idea and, by far, the most important money saving
tip we can think off.
Before the Christmas splurge starts work out
how much you have to spend, then work out the
total price of all the presents, all the partying and
all the food that you’re going to need.
After you have recovered from the inevitable
shock, you’ll know how you’re fixed you can start
trimming accordingly. When it comes to Christmas
food it is surprisingly easy to knock substantial
amounts off the bill.
Once the turkey, ham, biscuits, mince pies, rashers and sausages, melon, plum pudding, trifle and
chocolates are polished off, the typical Irish adult
will consume around 6,000 calories on Christmas
Day alone.
The key to spending less is to buy less. Around
30 per cent of the food that comes in to Irish homes
this Christmas will go out the same doors days later
in rubbish bins that’s around half a tonne of the
two million turkeys which will be sold this year.
Not to mention the discarded vegetables, dairy
products and the rest.
C U F O C U S W i nt e r 2 0 0 9
The reason we throw out so much is because we
buy so much. People who are careful food shoppers year round tend to lose the run of themselves
in the run up to Christmas and shop like they are
heading into a nuclear winter. This is because many
of us still labour under the misapprehension that
once Christmas Eve comes the shops will close
for ever.
They won’t. That may have been the case a
generation ago but the reality now is that virtually
all the smaller supermarkets have re-opened before
Santa has got back to the North Pole while most
of the bigger supermarkets are open for business
again on December 27th.
So, when you walk up and down the frenzied
aisles in the run-up to Christmas this year just keep
repeating the mantra, the shops will open again
soon, the shops will open again soon and resist
the urge to overbuy.
When it comes to the food you do buy make
sure you make the right choices. A 14 pound turkey
for a family of five is ridiculously expensive and
will leave you eating the bird until its coming out
your ears. Ten pounds is plenty. Similarly, don’t
buy a big ham, a five pound hams all a family of
five will need, particularly if the Christmas plate
is bulked up with homemade stuffing - one of the
easiest and cheapest and most filling elements of a
Christmas dinner and root vegetables, which are
in season, filling and cheap.
The days of bedecking your house with enough
festive illumination to put a small Las Vegas casino
to shame are also behind us. The cost of decorations
does very much depend on where you buy them.
You can pay close to €50 for a single, very tasteful
C U F O C U S W in ter 2009
bauble in a top department store or for the same
amount buy enough cheap decorations in Penney’s
to adorn your tree and your neighbour’s tree. We’d
recommend the latter option. And while we’re at
it, send fewer Christmas cards – they’re dear, environmentally unfriendly and, with the omnipresent
nature of e-mail, a needlessly complex way to tell
friends you’re thinking of them.
And as for kids presents, it may be time to stop
expecting Santa to always bring the must have toys
and gadgets. Most of us lost the run of ourselves
during Christmas’s past. Remember the fondest
memories are not made from such things – the
memories that stick are much more basic that the
acquisition of more stuff dressing a Christmas tree,
visiting relatives, making the Christmas pudding.
Getting kids to make presents and cards costs less
but is also a very positive experience.
When it comes to friends and extended family
consider a present freeze – that is not to say be
all Scrooge-like but think who you’re buying for,
and ask if spending €25 on a bottle of whiskey for
someone who’ll spend €25 on a bottle of whiskey
for you makes sense in these cash-strapped times.
Make a list of such people and contact some suggesting a joint embargo till the recession lifts,
chances are they’ll be delighted.
11
Credit
Unions
in New
Zealand
What is the current status of credit unions
in New Zealand today?
Credit unions in New Zealand have been
going through a period of consolidation
over the last few years, reducing from
around 50 in 2006 to 31 today. In the
last year there have been a number of
significant mergers amongst the 6 of the
7 biggest Credit Unions. Following this,
the 4 largest credit unions each now have
assets greater than NZ$100million with
the largest being NZ$135million. As a result of these mergers, many of these larger
credit unions now serve quite widespread
geographic areas.
How many credit unions are there and
how many branches are there?
NZ has a total of 31 credit unions, with 25
of these being members of New Zealand
Assoication of Credit Unions (NZACU)
and 6 non-members. NZACU member
credit unions have 86% of the total assets
of NZ credit unions with 102 branches.
What percentage of the New Zealand
population has a credit union account?
5.11% (4.2m people/215,000 members).
12
What is the total amount of
savings and loans?
Total Assets (NZ Credit Unions)
= $722million
Total Assets (NZACU Members)
= $620million
Total Saving (NZACU Members)
= $495million
Total Loans(NZACU Members)
= $475million
What would be the amount of the average
credit union loan in 2008?
Personal unsecured lending is currently
averaging $5,000, so we would expect
the average loan amount to be $5,000
– $10,000. Current mortgage loans average $75,000, so the average loan will
be around $100,000 – $120,000. (As an
Association we only have access to the
current total and average figures with no
way of determining the individual origination figures.)
What legislation governs credit unions
in New Zealand? Is other legislation
needed?
All credit unions are registered under the
Friendly Societies and Credit Unions Act
1982 (FSCU Act). Other legislation includes Reserve Bank Act and Securities
Act. The FSCU Act has severe limitations
and in some cases conflicts with other
governing legislation and needs co-ordination and refinement for today’s trading
conditions.
Who regulates credit unions in New Zealand?
In terms of the FSCU Act, the (Government) Registrar of Friendly Societies &
Credit Unions regulates credit unions. Prudential supervision is by the Reserve Bank
and as part of this the actual prudential
monitoring is undertaken by Corporate
Trustee Companies, in accordance with
Trust Deeds.
What effect has the current economic
difficulties had on credit unions in New
Zealand?
A significant reduction in spending by all
NZers has resulted in credit union lending
also being well down. A positive aspect is
that all but 5 of our member credit unions
have chosen to participate in the Government Retail Deposit Guarantee Scheme.
Do these developments represent an opportunity for or a threat to credit unions
in New Zealand?
The current economic environment ought
to be good for credit unions, and will be,
once consumers start spending again.
Describe what the retail financial service
landscape in New Zealand is like today.
Very, very flat!
What is the typical credit union in New
Zealand like?
A savings and loan institution - the majority of the larger ones providing a suite of
banking products.
Are there any services which New Zealand
credit unions would like to offer that they
currently do not?
An internationally accepted credit card.
Do New Zealand credit unions offer members credit, debit and ATM cards?
We have our own credit cards and debit
cards which operate in all EFTPOS and
ATM machines. We also have our own
network of ATM machines which compete
with the Banks ATM networks.
Do you have a strategic plan or goals for
New Zealand credit unions for the next five
to 10 years? If so, what are the key goals?
There are three key strategies; being
Growth, Creditability & Best Practice.
These three strategies are underpinned
by a number of operational goals and
targets.
Is governance of credit unions in New Zealand largely centralised or is it still local?
Governance is localised with each credit
union entirely responsible for their own
governance and compliance.
Has the New Zealand movement set up
CUSO’s? If so what services do they offer?
NZACU is structured into two major
Divisions – Member Services and Business Services.
Member Services Division provides a range
of support services to member credit unions
for their operations and strategic development, in the following areas:
• Representation to Government
on legislative matters
• Representation to the Regulatory
bodies
• Education and development for
credit union directors, management
and staff
• Risk and Compliance services
and support, including:
–Advice and assistance
relating to legal
regulatory obligations
–Strategic planning
–Governance guidance
–Management systems and
accounting procedures
–Financial and operational
performance monitoring
–Best practice guidelines and
benchmarking
• Business Development services and
support, including:
–Public affairs and public
relations guidance
–Communication and
marketing guidance
–Production of Credit Union Newz
(magazine), Annual Report, other
publications and marketing material.
Business Services Division develops and
supplies financial, banking and insurance
products to member credit unions as well
as to other non-bank financial institutions.
Major products include:
• Banking Services, providing a comprehensive range of products:
–Accesscard – a Maestro enabled
debit card which can be used at
EFTPOS/ATM locations locally
and overseas
–Accesscredit – a secure PIN-based
Maestro enabled line of credit
card which can be used locally
and overseas
–Accessweb – a two-factor authentication enabled internet banking
platform
–Accessphone – a secure
telephone banking service
–Accesstxt – a mobile phone
banking balance enquiry, bill
payment and fund transfer facility
–Accesscash – a credit union
owned ATM network.
• Financial Services, providing a
full range of products:
–Central Banking facility to accommodate surplus credit union funds
as well as to provide a complete
banking package for member
credit unions, including a current
account, revolving credit, liquidity
support, term investments, line of
credit, overdrafts and interest rate
swaps
–Interface to the NZ banking clearing system allowing individual
credit union customers to have a
credit union account in the banking system and directly receive
cleared funds
–A full range of payment options,
including direct debits, direct
credits, automatic payments and
cheques
–A range of flexible and affordable
home loan & mortgage options
–Credit Union KiwiSaver scheme
– a government initiated long term
retirement savings scheme offered
by credit unions.
• Insurance Services, providing a range
of products either directly or managed
through an insurance partner including
Fidelity and Liability Insurance, Loan
Protection and Repayment, Life Insurance and Life Cover, Motor Vehicle
Insurance, House and Contents Insurance, Income Replacement Insurance
and Funeral Plan.
• Information Services, manages and provides the FACTS Computer Bureau,
including a 24-hour online real time
banking system specifically tailored to
credit unions’ needs and secure internet access & email facilities for credit
unions.
From early 2010 all NZ non-bank Financial Institutions (above NZ$20m)
will need to obtain an internationally
recognised credit rating. NZACU member credit unions have recently agreed to
establish a Group Guarantee Scheme to
provide cross guarantees for participating
members and to collectively obtain credit
ratings on a combined basis. This facility
will be managed by a new division of the
Association.
Does the New Zealand movement support
the development of other movements in
developing countries? If so which ones?
Yes in whatever limited ways we are able
to. The two credit union based Foundations in NZ only have very limited funds.
The closest relationship is with the Fijian
and Pacific Island Countries.
Article submitted by Doug McLaren
– Chief Executive, NZACU,
Email [email protected],
and Neil McDonald, WOCCU Director,
Email [email protected]
13
ILCUnet –
THE SECURE
CONNECTION
The core component of the ICT Strategy is the phased delivery of a secure network to which all
credit unions can be connected. A tender process has taken place and Interfusion Networks
Limited, an Irish company, were awarded the contract. The company has previously been
awarded Best Network Infrastructure in the ICT awards and also have been listed in the Deloitte
Technology Fast 50 and the European Fast 500 in 2006, 2007, 2008 and 2009.
The network is branded ‘ILCUnet’. In the majority
of cases, the network connection will be delivered to
credit unions via a standard telephone line, similar
to most broadband connections. Your credit union
will retain control over who can access your computer systems.
ILCUnet will not interrupt your current product
and service offerings to your members. Malcolm
Moir was hired as Network Services Manager in mid
August 2009 to manage this project. The Pilot Phase
will run from October to December, during which
time the Network will be rolled out to a pilot group
of credit unions. The purpose of the pilot phase is
to evaluate the design and procedures for deploying
ILCUnet. Obtaining feedback from participating pilot
credit unions will be a key part of this phase. Subject
to a successful pilot the main rollout to credit unions
will begin in January 2010.
ILCUnet is the first step towards providing future
products and services to your members at a reasonable
cost. Future services on ILCUnet will be provided by
IT Suppliers and may include:
• Business Intelligence
• E-Learning/Computer Based Training
• Bulletin Boards/Discussion Group Forums
• Teleconferencing
• Electronic Funds Transfer & Access to Clearing
• Internet Banking
Benefits to Credit Unions
A Credit Union Network for Credit Unions
ILCUnet will be wholly owned by the credit
union movement.
Managed for credit union people by credit
union people
The ICT Office will ensure that you are getting the
best service available and will assist you if you have
any queries.
14
High-End Security
Top-of-the-range security protection for all credit
unions regardless of their size.
Fast Network Speed
Credit unions can connect to ILCUnet through a large
range of access methods. In the majority of cases this
allows you the luxury of choosing the connection
speed that suits you.
Internet Protection
ILCUnet will offer you top-of-the-range protection
from Internet based threats in accordance with best
business practices by providing Anti Virus protection
and limiting access to inappropriate web sites.
Reduced Connectivity Cost
Most credit unions with sub-offices will see a reduction in cost for connectivity between offices by using
ILCUnet.
Secure Remote Access
Upon request, you may have the facility to access
your credit union systems while you are on the road,
through a secure remote access solution subject to
your own Credit Union Policies and Procedures.
Email Protection
An optional protected email solution is also available
with ILCUnet. Protection from Email based threats
will be included as standard by providing Anti Virus
protection and Spam Filtering.
Benefits to Credit Union IT Suppliers
Increased Footprint
IT Suppliers will be able to offer their services via
ILCUnet on a national basis.
Network Monitoring
IT Suppliers will have access to network monitoring tools allowing them to immediately identify any connectivity problems which your office
may experience.
Security
IT Suppliers can rest assured that ILCUnet is secured
with enterprise level security devices.
Fast Network Speed
IT Suppliers can make use of potentially increased
access methods for your credit union to connect
to services.
Better Support
IT Suppliers can call on support from a dynamic and
responsive telecoms provider.
Amárach Research
Earlier this year the ILCU commissioned independent
agency Amárach Research to survey 1,200 adults
throughout Ireland to gain insight into members’ and
non-members’ views of current credit union services,
and their willingness to use additional financial services if they were provided by credit unions.
Jimmy Johnstone, Vice-President of the ILCU
and Chairperson of the National Technology Committee, said of the Amárach Research report, “The
detail within the report clearly indicates that credit
unions are pillars of the community, have members’
best interests at heart, and can be trusted. Member
satisfaction with their credit union is extraordinarily high as credit unions have friendly staff, provide
a good service, and are seen as helpful, safe, secure
and trustworthy. Members and non members alike
would like to use credit unions for more of their
financial needs as there is very strong interest in
Insurance products, current accounts, debit cards,
ATM’s, laser cards, pensions, receipt of government
payments and online banking.”
Commenting on the ILCUnet agreement with
Interfusion Networks, ILCU CEO Kieron Brennan
stated: “Credit unions will now have a common, secure, Credit Union owned communications platform
which will serve as the foundation for credit unions
to continue to work with their own IT Supplier to
develop and offer many new services to their members. With membership increasing every day, now
is the time for us to take advantage of economies of
scale, and leverage technology to offer the financial
products and services members throughout the credit
union movement want.”
How does a credit union join the ILCUnet pilot?
Your credit union may contact the ICT Office and ask
us to complete a site survey of your credit union.
The ICT Office together with Interfusion and your
IT Supplier will:
• Review your current IT infrastructure and report
our findings back to you.
• Advise you on a suitable connection option for
your credit union.
• Provide you with a choice of alternative connection options.
• Provide you with full details of the costs.
• Explain in detail the support services that are
available to you for ILCUnet.
Pictured at the ILCUnet contract signing:
Front Row (L–R): Kieron Brennan, CEO, ILCU and Steve Mac Nicholas, CEO,
Interfusion Networks Limited. Back Row (L–R): Malcolm Moir, ICT Network Services
Manager, Chris Doran, Interfusion Networks Limited and Jim Williams, ICT Strategy
Implementation Manager.
Your credit union will:
• Choose which connection option to take and place
an order.
• Identify a spare telephone line or order a new
one (other connection options are available for
locations where phone lines are not suitable).
The ICT Office together with Interfusion will:
• Deliver and install the ILCUnet equipment
• Provide you with connection instructions for your
IT supplier.
Your credit union will:
• (in the majority of cases) ask your IT supplier
to connect your current IT infrastructure to
ILCUnet.
The ICT Office Contact Details
ICT Office, Email [email protected]
Sharon Kearns, ICT Communications Specialist
Tel + 353 1 614 6765
Malcolm Moir, ICT Network Services Manager
Tel + 353 1 614 6771
Jim Williams, ICT Strategy Implementation Manager
Tel +353 1 614 6936
15
Leveraging the
Power of
Local Radio
Radio listenership in Ireland is particularly
strong. The Joint National Listenership
Survey for 2008 revealed that 85% of
adults in the Republic of Ireland listened to
radio each workday. Local radio stations
play a particularly important role, with the
listenership share in 2008 at almost 50%
of all adults.
16
Case Study 1
Chapter 5 & Chapter 6 Credit Unions
sponsor LMFM‘s Road Runner.
In late 2006, Gerry Kelly from Faughart Credit
Union Limited and Seamas Watters was Ballybay
& now Cuchullain Credit Union Limited engaged
in discussion on the possibility of using LMFM
radio station in order to promote credit unions to
people in the local area. Gerry subsequently called
in to LMFM to explore opportunities to raise the
profile of the credit unions in the locality. At that
time Ireland was going through enormous change
with the Celtic Tiger and with that increased competition from financial institutions. It was felt that
the credit union message was being lost and this
needed to be addressed.
LMFM and local credit unions joined forces in
2007 with a sponsorship of LMFM’s outside Broadcast Unit, the CU Roadrunner. From this meeting
the LMFM Credit Union Road Runner was born.
LMFM already had an outside broadcast unit,
which needed a fresh image so the joining of forces
with the credit union gave them an opportunity to
also refocus them on their own branding.
The CU Roadrunner has proven to be an unqualified success. This year to date, the Roadrunner has
been out and about over 150 times in the northeast
including Ashbourne, Kells, Clogherhead, Carrickmacross, Dundalk, Navan, Castleblaney, Trim,
Rathoath, Ardee, Dunboyne, Drogheda, Blackrock,
Dromiskin, Carrickmacross, Inniskeen, Cooley and
more. Each time the CU Roadrunner is out and
about the credit union name is promoted and the
profile is raised. The CU Roadrunner also visits
each of the contributing credit unions to hold an
outside broadcast outside the credit union.
Barbara Markey, Chairperson of Chapter 6 is
very supportive of the link with LMFM.
“Chapter 5 and 6 working together with LM/FM
has been a great benefit to all participating credit
unions. It has given the credit union huge exposure
Michele Meegan,LMFM, Gerry Kelly,
Faughart Credit Union Limited and Tony
Moroney, Mellifont Credit Union Limited.
and constant promotions along with advertising at
local level at an unbelievably low cost. All participating credit unions had the added advantage of
having Outside Broadcast Unit at their office, and
this can be used in conjunction with a Member’s
Draw, credit union anniversary or a local event
in the community, which all helps to increase the
profile of credit union in the local area”.
The inter-chapter cooperation in relation to
LMFM has assisted in developing a stronger link
between the two Chapters. The Chapters held an
Inter Chapter ‘Year End Seminar’ in September
to further develop the relationship. The event
proved to be very successful with speakers from
the ILCU including President Mark Bailey, Head
of Communications, Mandy Johnston and Head of
Monitoring, Tom Kiely as well as Deputy Registrar
James O’Brien. Delegates from almost 50 Credit
Unions were present and issues regarding Year End
were discussed including payment of dividend,
Regulatory Reserve, bad debt provisioning and
Pearls Ratios.
The credit unions who participated in the promotion in 2009 were as follows: Ardee, Athboy,
Ashbourne, Ballivor, Ballyjamesduff, B.H.K.,
Carrickmacross, Clogherhead, Collon, Cooley,
Drogheda, Dunleer , Duleek , Dunshaughlin, East
Meath, Enfield, Faughart, Holy Family, Oldcastle, Kells, Kingscourt CU, Lordship, Mellifont,
Moynalty, Monasterboice, Navan, St. Scire,
Slane, Tara & District, Trim and Virginia Credit
Unions Limited.
Case Study 2
Community Radio in Northern Ireland
In 2008, the Northern Ireland Committee of the
Irish League of Credit Unions organised a pilot
series of six half-hour programme on credit union
history services and future plans on Belfast’s radio
Feile FM. The shows proved to be a popular addition to the West Belfast radio station’s spring
schedule and could provide a template for future
initiatives to market credit union services throughout Northern Ireland.
Féile FM is the station of Feile an Phobail, the
popular West Belfast Community Festival, which
first started broadcasting in 1996 with a restricted
licence. It gained a full-time licence in October
2005 in recognition of its success in building links
with the West Belfast community, both catholic
and protestant.
The pilot shows were based on a conversational
format with a number of credit union contributors
and also interviews with Eleanor Gill (Chief Executive of the Northern Ireland Consumer Council)
and Bob Geldof, carried out at the Nora Herlihy
memorial lecture. The pilot programmes included
credit union background and services, the 50th anniversary celebrations, the role of credit unions in
local communities, debt management, volunteering,
the ILCU Foundation and the future development
of credit unions. Podcasts of the pilot episodes are
available at www.creditunion.ie under the News
and Events section.
17
National
Advertising
Campaign
CU at Your
Place
Introduction
Following on from the great success of the
Advertising campaign in 2008 and early
2009 it was felt that we needed to move
it on from an awareness and informative
campaign that had a broad national appeal
to a more local focussed platform that concentrated on the fundamental strengths of
the Credit Union Movement and one that
reflected the current environment we are
in. Using local media allows us to reach the
members in their own community through
their own media and once this is established
it allows us to bring our communication to
a wider national platform once more.
A key element of the transition to the
new advertising campaign is the retention of the line ‘CU at your place’ which
firmly captures the sense of membership
equalling ownership.
The Thinking
The difficult market conditions helped shape
our thinking by enabling us to highlight the
unique strengths and values of the credit
union movement that no other financial
institution can lay claim to. With over 500
credit unions on the island of Ireland holding over €10 billion worth of assets we
know there is strength in our numbers. We
also know that we are both the safe and
the secure option for our members’ loans
18
Introducing the
new face of the
Credit Union,
Brian O’Driscoll,
Ireland’s rugby
super star.
and savings. We can leverage these benefits
to increase confidence and drive our new
membership base.
We believe that one of the most effective
ways of capturing this was through using a
National and World class star that embodied
what the Credit Union stands for. This star
is rugby player, Brian O ‘Driscoll, Captain
of Ireland, Captain of the 2007 Lions, a
key member of Leinster and of course a
credit union member. Brian has the credibility and integrity to represent the credit
union movement and is a true representative of our values of ‘Safe, Strong, Secure’
which features extensively on all our adverting material across Press, Radio and TV.
Most importantly of all he is someone you
can trust, someone you know will not let
you down.
In addition the impact of such a high
profile star will we believe make many
people consider the credit union as a real
alternative to their bank and will act as a
very strong driver in recruitment especially
in the younger age groups. The ‘Brian O
Driscoll’ factor will also give credit unions
real ‘talkability’ that we will never have had
in such a meaningful way before. All of this
combined with the great PR story this gives
us, really makes it a very exciting time for
all of us in the movement.
My place has always
been there for us
Safe, Strong, Secure.
There are many benefits of being a member of your local credit union. For a start,
membership equals ownership. So you have a say in how it is run. And because credit
unions are community-based, you enjoy the reassurance of knowing exactly who you’re
dealing with. A credit union is a valuable resource to any community – it means there’s
a safe place for savings and a smart place for loans right on your doorstep.
Today 2.9 million members enjoy the benefits of credit union
membership. Credit unions are based in communities and built on
trust. Each individual credit union is owned and independently
managed by its members. It’s people just like you, who save
with their credit union and borrow from it, who control it
and share in its success.
So it’s a good time to be part of your local credit union.
Credit unions are regulated by the Financial Regulator.
The Creative
The Credit Union is at the heart of every community and we wanted to demonstrate this in
our advertising by establishing Brian in a real
local credit union (in this case Drogheda Credit
Union Limited).
The press campaign supported by radio establishes Brian as the new face of the Credit Union
and re-enforces the ‘Safe, Strong, Secure’ messaging as well as allowing us to inform readers
and listeners of how being a member also means
being an owner.
We also wanted to focus on the importance
of your local credit union in this campaign and
used the local press to detail names and contact
numbers of each participating credit union.
We will be able to expand on this with the
launch of our TV campaign in January 2010
which has both members and staff featuring
heavily in a set of commercials that develops the
community values of each and every credit union
as well as highlighting the benefits of membership
in an impactful and enjoyable manner.
An important element of all of the creative
work was to ensure we reflected Brian in a credible and relevant manner one that plays to his
strengths and is reflected in our own.
The Media
Our new campaign launched across the island
of Ireland on October 12th 2009 in both press
and on radio and ran for an optimum period of
3 weeks. In total it featured in 81 local papers
and 10 nationals reaching more than 8 out of 10
adults in ROI and 6 out of 10 in NI.
In each paper we ran either a full page colour
in the tabloids or a ‘page killer’ in the broadsheets that gave us a very strong immediate
visual impact.
The local press was supported by some key
National titles such as the Irish Independent,
the Irish Times, Belfast Telegraph, Irish News
Credit unions are regulated by the Financial Regulator.
etc; this ensured we reached as many people as
possible over our campaign period.
We also ran a concurrent radio campaign across
both national and local stations, 34 in total. This
communications channel allowed us to bring our
press campaign more to life by enabling Brian to
expand on our key messaging and it also enabled
us to further reach our audiences to promote the
movement. In all, the campaign delivered over
2,000 (30 seconds) radio spots reaching 7 out
of 10 adults in ROI who will have had the opportunity to hear the ad 13 times or more and
6 out of 10 adults in NI with an opportunity to
hear the ad 5 times or more.
We are currently planning our TV and radio
campaign which will run across all the major
TV channels in January for 3 weeks. In total it
will run across 14 TV channels and expect to
reach 85% of all adults across the 32 counties
with each one seeing the TV commercial at least
5–6 times.
For further information, contact the ILCU
Communications Department on +353 1 614 6781.
19
Brian O’Driscoll and children from the
Central Model School, Marlborough
Street, Dublin 1, pictured at the
launch of the Credit Union Schools
Quiz 2010.
Brian O’Driscoll
Launches the
Credit Union
Schools Quiz
2010
Brian O’Driscoll Irish International rugby
player launched the 19th Annual AllIreland Credit Union Schools Quiz. This
enormously successful competition will
be run in communities all over Ireland by
volunteers from over 500 ILCU affiliated
member credit unions. Over 25,000 young
people took part in last year’s contest.
Commenting on the launch Mark Bailey
President of the Irish League of Credit Unions said “The credit union movement have
always supported young people through
our community initiatives. Our All- Ireland Schools Quiz – run by credit union
volunteers - is a good example of what we
mean by community commitment. This in
an important initiative for the credit union
movement as it helps us to educate young
people about the value of learning in an
open and encouraging environment”.
20
25,000 children to
compete – North and
CAPTION
South –PHOTO
in biggest
AllBrian
O’Driscoll and
children
from the Central Model School,
Ireland
quiz Street, Dublin 1, picMarlborough
The Quiz is divided into two sections:
Competition A for children up to 11 years
and Competition B for children between
11 and 13 years.
Speaking at the launch, Brian O’Driscoll
said “The Credit Union Schools Quiz
stimulates and encourages young minds
to expand their general knowledge as
well as teaching young people essential
team-work skills”.
HOW THE CREDIT UNION SCHOOLS
QUIZ WORKS
• The Credit Union Schools Quiz is divided into two sections: Competition A
for children up to 11 years and Competition B for children between 11 and
13 years.
• Local Quiz Winners go through to the
Regional Finals and Regional Winners
tured at the launch of the Credit
Union Schools Quiz 2010.
•
•
•
•
•
and Runners-Up (100 teams of four
children) will compete for the National
titles in April 2010.
Local winners will receive prizes from
their local Credit Union.
Regional Winners and Runners-Up will
also receive prizes and their schools will
receive cheques.
The National Winners and RunnersUp receive a silver salver, significant
personal prizes – and their schools are
each awarded a substantial cheque.
Every finalist also receives a special
certificate marking their achievement.
Teams must submit their entry on the official entry form by Monday 18 January
2010 to their local credit union. Entry
Forms are available at participating
credit unions.
Give the
Gift of Life
While the critical need for organ
donation has generally been recognised
throughout the island, it often takes a
personal story to outline that organ
donations can and do save lives.
In September, Frank Deasy, an award winning script
writer, announced on the Joe Duffy Liveline show
on RTE Radio One that he was in urgent need of
organ donation, highlighting that he considered
the waiting list for such donations as “an invisible death row”. A number of other callers
also outlined their harrowing stories detailing
their experiences on the waiting list. With
more than 600 people in Ireland waiting for
organ transplants, Joe issued the call to the
general public to step up to the plate and
carry organ donor cards.
Given the strong network of credit
unions throughout the island, this represented a tremendous opportunity to
help this worthy cause by making donor cards available in all ILCU affiliated credit unions in the Republic of
Ireland. Following a call to the Joe
Duffy show, this offer was gratefully
accepted by Mark Murphy, Chief Executive of the Irish Kidney Association and very
well received by Joe Duffy and callers and texters
to the show.
50 organ donor cards contained in a display case
with information facilities have been sent to all
affiliated credit unions in the Republic of Ireland.
Credit unions are asked to display the case in a
prominent location within the credit union.
According to Mark Murphy, Chief Executive
of the Irish Kidney Association, “We are delighted
that credit unions in Ireland have come on board
to support this initiative. Recent research has highlighted that you are 3 times more likely in your
lifetime to require organ donation, than you are
ever likely to become a suitable organ donor. It is
also noteworthy that Ireland is now in 13th place
in Europe for organ donation compared to seventh
place in 2007. We hope that distributing organ
donor cards via the credit union network will help
to arrest this decline.”
What is organ transplantation?
Organ transplantation means the removal of an
organ from one body and its resiting in another
body. Some organs can either be taken from a living person (LIVING DONOR), or from a patient
who has died in hospital from some other cause
(DECEASED DONOR). The deceased person has
usually carried a Donor Card.
Are all organs suitable for transplantation?
In general organs are suitable for transplantation if the person dies between the ages of 1 and
75 years. It is desirable that the person is free of
significant and relevant general disease such as
cancer, serious high blood pressure or, of course,
any organ disease.
How can I become a donor after my death?
Simply sign a Donor Card and request your next
of kin to sign it also indicating their willingness to
honour your wishes. You may choose which organs
you wish to donate. Carry your card with you at
all times, so that in event of sudden untimely death
you wishes become known immediately. Organs are
only taken from those who die in hospital, usually
following admission in an emergency.
Should you require additional information, please
contact Ashling Hand in the Irish Kidney Association
on +353 1 620 5306.
21
Credit Unions
in Albania
An interview conducted with Elvana Sharkaj, General Manager of the
National Apex of Credit Unions in Albania, called Jehona.
The ILCU International Development Foundation Limited (ILCUF) became involved in
Albania in 1995. At this time, there was no
credit union movement of any type in Albania.
The ILCUF is supporting the credit union
movement in Albania through its national
apex body called Jehona. Currently, Jehona
has a membership of 26 credit unions, with
almost 10,000 members and savings of over
€2.5 million.
Could you tell us a little about Albania and
its history (comparing it to Ireland)?
Albania lies to the north of Greece, south of
Yugoslavia and to the east of the heel of Italy,
on the shores of the Adriatic and Ionian seas.
It is a small country, just 1/3 the size of Ireland
but it is so mountainous and has such poor
roads that it appears three times bigger. Albanians do not measure distances in kilometers
or miles but in hours.
After World War II the Communists took
control and the land owning elite fled to America or perished. The Communist rule gradually
degenerated into the most extreme dictatorship
in Europe, if not the world. Hoxha abolished all
forms of private property, even the ownership
of a chicken or a beehive became an offence.
He abolished all religions, forbid the teaching
of foreign languages, sealed the borders tight.
Defectors were few, as the punishment inflicted
on a defector’s family at home was too awful to
contemplate. Hoxha finally died in 1985. The
communist era dragged on until 1992 when it
22
finally fell, the last to fall in Eastern Europe.
The collapse of communism and transition to
democracy was a painful and confusing time
for Albania. The first years were marked by
a mass exodus from the country.
Within Albania the collapse of Communism
was accompanied by a virtual collapse of the
entire state. The people vented their anger
on the entire state. Factories and farms were
destroyed, mistakenly taken to be part of the
dictatorship, savings and investment schemes
sprung up which offered poor and rich Albanians alike fabulous amounts of interest.
Inevitably the schemes collapsed, in 1997.
The savings of over a half a million Albanians
were lost, the backlash was an outbreak of
violence and civil unrest that left over 2000
dead in six months.
Could you tell us a little about yourself, your
family, hobbies and interests?
I’m Albanian, 39 years old. I have lived in
Tirana since 1976. I graduated from the University of Tirana Economic Faculty Finance
branch in 1992. I live with my husband and
two daughters Erika 11 years old and Emilia
6 years old. I enjoy reading and listening to
music in my free time.
How did you originally become involved in
the Albanian credit union movement?
I use to have links with women NGOs in
Tirana to identify and support women that
were in need of credit. In one of the NGOs I
Volunteer Board of Directors of Jehona with
Elvana Sharkaj who is standing third from the left.
met Sinead White – an Irish UN worker in
Tirana involved with a Women’s development /UN project. Sinead made contact
with the ILCUF and we drew up the first
pilot credit union project.
How do you promote credit union services in Albania?
We promote through ‘word of mouth’,
through promotional seminars, celebration of local events, leaflets, posters and
magazines, articles in newspapers, national conference, TV publicity and TV
programs. In our experience the ‘word of
mouth’ and celebration of local events has
been more efficient and the best way to
promote credit unions activity.
Are there any particular products or services which you would like to see developed
as a priority during your term?
To expand debit transfer and wage deduction schemes for more credit unions,
new products for regular savings and new
time deposits.
Do you have a strategic plan or goals for
Albanian credit unions for the next five to
10 years? If so, what are the key goals?
We do have a strategic plan for the next
three years. Our main goal is to have
100% self sustainability and to set up
a SPS fund for credit unions by the end
of 2012.
What would be the amount of the average
credit union loan in 2009? €1,500.
How has the ILCUF helped Albanian
credit unions?
I would like to say that without the ILCUF the Albanian credit union movement
wouldn’t exist today. The idea of the credit
union was formed as a result of the huge
support in technical and financial assistance. ILCUF gave us financial support
that enabled the establishment of 26 credit
Elvana pictured with the Irish Ambassador, Anton Mac
Unfraidh along with Oltion Hyso another staff member of
Jehona. The Irish Government through the ILCUF have
provided €160,000 of funding to credit unions in Albania
over the last three years.
unions and the Union of CU (Jehona),
technical assistance was offered through
technical advisers based in Tirana, and
also from technical advisors in short visits, training in Albania and Ireland, and
study tours. The Albanian movement has
and will always be grateful to the Irish
credit union movement and ILCUF for
all the support given to them in the past
ten years.
How useful have visits been to Ireland
particularly Irish credit unions?
As I said the credit union idea was very
new to the people of Albania. In the early
years the study tours were of enormous
value because the Albanian volunteer
could see and have a better understanding
of what was involved. The Irish credit
unions were an excellent source of knowledge. Study tours in Irish credit unions are
memorable for all the Albanians who took
part in them and for the endless hospitality
of Irish volunteers.
How have credit unions helped women
in Albania and are they well represented
on the board of directors?
Credit unions have played a vital role in
enabling women to get out of the house,
to learn some new skills, to give them the
opportunity to apply for loans, to help
them to start a small business idea, to
improve their life and that of their families, participation of women in the credit
union structure is over 60%
What has been the impact of the recession
on ordinary credit union members and
credit unions in Albania?
The impact of the recession is reflected
in the reduction in remittances from emigrants, this income represents about 13%
of GDP in Albania. This reduction has
had more effect in the rural areas were the
percentage of emigrants is higher.
Albania is affected by the changes in the
exchange rate. It is surrounded by EU
country members that use Euro currency.
The exchange rate of Euro is gone up
from €1=123 Leke to €1=140 Leke and
it is expected to go up more by the end
of the year. This means that prices of imported goods will increase and mortgage
repayments (which are paid in Euro) will
increase while the income of the populations remains static in Leke.
In credit union business the recession
has reduced the level of deposits and six
months ago increased the level of withdrawals. In the period from November
08 until March 09 the request for loans
was very low.
Are there volunteer directors in Albania
and are they active in the Albanian credit
union movement?
All the credit union directors are volunteers. In Albania you don’t have the same
level of volunteers as in Ireland. During
the communist regime the Albanians did
a lot of volunteer work because the
regime dictated it at the time. After the
collapse of the regime and the changes
that took place it took time for people
to understand that volunteering under
democracy was different to volunteering
under the old regime.
The ILCU International Development
Foundation Limited is supporting the
long-term development of credit unions
in Albania, Russia, The Gambia, Ethiopia, Ghana and Sierra Leone and assisting small development projects worldwide. This valuable work is possible
thanks to the generous support of Irish
credit unions.
For further information on the work of
the Foundation please visit our website at
www.creditunion.ie/foundaitons or contact
Áine O’Dowd on +353 1 614 6746 or by
email at [email protected].
23
Word
of Mouth
Marketing
What is the first thing we do when we want to find a good restaurant,
accountant, holiday destination or a good film? We ask others for
a recommendation – be it friends, relatives or work colleagues.
If we trust the person making the recommendation, we often
act upon the referral. The net result is that the business we were
referred to gets another customer without having to spend a cent on
advertising or promotion. Keeping in touch with satisfied members
and encouraging them to talk up your credit union is the most cost
effective form of promotion you will ever get.
As credit union personnel seek to attract new
members to the credit union, a low or no cost solution might be as plain as the ‘mouth’ on your face.
Word of mouth is the act of consumers providing
information to other consumers. Word of mouth
marketing entails giving people a reason to talk
about your products and services, and making it
easier for that conversation to take place. It is the
most honest form of marketing, building upon
people’s natural desire to share their experiences
with family, friends and colleagues.
The importance of the satisfied member has long
been apparent to credit unions. We are all aware
of the old adage of a satisfied customer telling on
average 3 people, whereas a dissatisfied customer
may tell up to 9 others. Pushing the boat out for
members or going that extra mile has long been
ingrained in our psyche. But is that enough? Are we
utilising those satisfied members to attract others
to the credit union movement?
A recent survey highlights the willingness of satisfied members to share their positive credit unions
experiences with others and recommend that they
too join their local credit union.
In the Republic of Ireland, two thirds of credit
union members had recommended to another party
to join a credit union. This advocacy was higher
amongst people based in Dublin (where membership penetration is traditionally lower than other
areas) and amongst females. In Northern Ireland,
incidences of recommending becoming a member were even higher at 72%. An analysis of the
data shows that four out of every five female members had recommended credit union membership
to another.
24
Some Examples
So what can credit unions do to encourage positive
recommendations? Some credit unions ask their
members to tell friends about positive experiences
at the credit union. However, could the credit
union go the extra mile? What about considering
a member referral programme which could incentivise current members to refer new members to
the credit union?
A number of years ago, Bishopstown Credit
Union Limited launched a ‘Tell a Friend’ member
referral programme. The scheme was based around
the premise of encouraging a friend who may be
eligible to become a member of the credit union to
become one. Application forms were distributed
throughout the credit union, including all sub-offices. The application form detailed the criteria
you need to become a member to ensure that the
referring member knew if the person is applicable
for membership. For each ‘friend’ who became a
member, both the referrer and the new member
were entered into a draw for a cash prize.
Stillorgan Credit Union Limited also operates
a Tell a Friend programme. They reward referred
new members with €10 (subject to certain terms
and conditions) lodged to their new account
and the referrer is automatically entered into a
special draw.
As well as providing the incentive to refer, it is
important to also provide the tools to do so. This
might be an online referral card which can be
emailed directly to a friend, a PDF which can be
printed from the credit union’s web site or referral cards which should be readily available in the
credit union.
Nielsen recently surveyed over 25,000 consumers online
across more than 50 markets. Of all the advertising channels survey, peer recommendation is the most trusted
channel, trusted “completely” or “somewhat” by 9 out of
10 respondents worldwide. This compared to 6 out of 10
for newspaper radio and TV ads. Text messaging was the
least trusted channel, trusted by 2 out of 10 responders.
“Trust, Value & Engagement in Advertising’, Nielsen Global
Online Consumer Survey, July 2009
Key Considerations
The key considerations for credit unions who wish
to encourage positive word of mouth marketing
are as follows:
1.Know your key factors for member satisfaction.
These are the things that your members either
consciously or unconsciously judge your credit
union by. For example it may be the personal
service which you provide, easy access to loans,
the opening hours, location etc. Find out your
key factors for satisfaction by asking your members in a survey, then concentrate very hard on
delivering on these key factors.
2.Reward referrers
Consider a referral programme whereby existing
members are incentivised to encourage others
to join the credit union. If you incentivise positive word of mouth, you are likely to get much
stronger results.
3.Reciprocate
If your credit union receives referrals from
another business in the locality, refer business
to the referrer whenever you can. For example,
should a local employer agree to establish a
salary deduction scheme within their business,
can you reciprocate by promoting the services
of the company to your members perhaps in
your newsletter?
4.Reveal your Good News stories
How has the credit union made a difference in the
lives of your members? Perhaps the credit union
was there to help when other institutions refused
to help. Maybe the credit unions stepped in to
support a local school’s fundraising activities.
In these uncertain times when bad news seems
to be dominating the headlines, find a unique
angle on the work of the credit union and let
the positive experience spread.
5.Educate your members
Credit unions have found that by providing financial education to members, they can
boost their reputation and member loyalty. Pick
a topic relevant to your members and make yourself the source of credible, current information
about that topic. Make your credit union the
ultimate source of financial news and education
within your community. What about creating a
money advice column on your website or in a
newsletter?
6.Fix problems fast
It would be remiss to cover word of mouth
marketing without mentioning the potential
for a negative response. In situations whereby
the desired outcome isn’t forthcoming, a speedy
response is vital to prevent negative word-ofmouth from spreading. Negative feelings about a
product or service can linger. However, this can
also represent an opportunity. Consumers can
generally tolerate mistakes being made. What
really irks with them is the lack of response from
a service provider. When faced with a complaint,
the response of your staff should be, “How can
I send this person away happy?” Rest assured,
if the response is timely, appropriate and makes
the person feel that they matter, a negative situation can be turned into a positive experience.
For further information on promoting your credit
union, please contact the ILCU Communications
Department on +353 1 614 6914 or email
[email protected].
Incidence of Recommending
Becoming a Member to Anyone else?
Base: All Dormant/Active Credit Unions Members
33% NO
28% NO
67% YES
ROI
72% YES
NI
25
ACCUP wins
Regulators’ Recognition
The Irish League of Credit Unions is delighted to announce
that the ACCUP programme has been recognised by the
Financial Regulator in the Republic of Ireland as a minimum
competency requirement and has also been endorsed by the
Registrar in Northern Ireland. This dual recognition endorses
ILCU’s approach in developing an all Ireland qualification
to meet the needs of all credit union personnel.
The demand for this year’s ACCUP programme has as a
result of Regulator approval been phenomenal with the
2009 course being oversubscribed and the ILCU offering
a new course beginning again in January 2010.
Meanwhile the 2008 group graduation will take place in
the Assembly Hall, Jordanstown Campus on Thursday
17th December at 3.30pm and all last years participants
are encouraged to contact the University indicating their
intention to attend this fun day out for all!
Pictured at the announcement by the Financial Regulator of the approval of the Advanced Certificate in Credit
Union Practice (ACCUP) was Mark Bailey, President
of the Irish League of Credit Unions and Adrian O’Brien,
Deputy Head of the Financial Regulator’s Consumer
Protection Department.
ACCUP as a Minimum
Competency Requirement
(ROI)
The official recognition of ACCUP as a qualification for
Insurance mediation purposes means that credit union
personnel requiring a recognised qualification may now
take the ACCUP programme.
On completion of ACCUP participants are awarded the
designation Recognised Credit Union Practioner (RCUP)
and in order to maintain this designation continuing professional development (CPD) will be required (40 formal hours
training over a three year cycle).
ILCU will be rolling out a full CPD programme to credit unions during 2010 allowing credit union personnel to easily
and conveniently attain and record their CPD requirements.
This will include the awarding of CPD hours for:
• current and new upcoming ILCU training courses
• e-learning courses to be delivered in early 2010
• relevant road shows & other special events such as
chapter and insurance forum
• chapter training and in-house credit union training
• relevant training from external providers
• reading and assimilation of quarterly CU focus
publication
ADVANCED CERTIFICATE IN
CREDIT UNION PRACTICE
PROGRAMME STRUCTURE
Pictured at the launch of the 2009/2010 ACCUP Programme in Belfast were Claire Doherty, Kilrea, Rasharkin
and Dunloy Credit Union, Sandy Williamson, Registrar
of Credit Unions, Northern Ireland and Brian McCrory,
ILCU Board Director.
*Insurance module is mandatory for participants offering advice on member-pay insurance
26
In addition ILCU will be putting in place a system
to help individuals and credit unions keep a
centralised record of their CPD to enable them to
more easily manage their ongoing CPD requirements. For all those taking ACCUP or indeed for
those grandfathered under the current Regulator MCR this will provide a credit union focused
CPD scheme.
Module 1: Roles & Responsibilities of Staff
Gives staff a detailed overview of what’s required of their function,
including opening accounts, taking loan applications, insurances and
internal controls.
Module 2: Legislation & Compliance
Focuses on the legal and regulatory framework in which credit unions
must operate.
Why take ACCUP
as your MCR?
Module 3: Lending and Credit Control
Provides key information on correct lending and credit control practices,
essential in today’s difficult lending market.
• ACCUP is a wholly credit union focused professional qualification and has been specifically
designed to equip credit union personnel with
the practical skills and knowledge to operate
effectively in their credit union.
Module 4: Basics of Credit Union Finance
Gives participants a sound understanding of the financial basis of a credit
union. Topics covered include shares and dividends, loans and interest,
the monthly statement and PEARLS ratios.
• ACCUP results in a University recognised qualification on successful completion, accredited by
the University of Ulster.
• ACCUP is a recognised minimum competency
requirement and covers all credit union business; including savings and loans as well as
insurances.
• ACCUP participants are supported by high quality manuals and workshops delivered in small
class sizes in credit unions across the Republic
of Ireland and Northern Ireland.
• ACCUP offers complete flexibility as assessment
is by completion of workbooks rather than exams,
while participants can complete each workbook
at their own pace.
• Not for Profit but for Service – ACCUP is highly
cost effective delivering six university accredited
modules and an additional induction module,
supported by full day regional workshops and
ongoing personalized tutor support for less than
€150 per module.
What participants
have said
“Very Informative. All information provided by facilitator and other students very useful. All queries
were dealt with.” Newry Credit Union Limited
“Very Interesting. Very relevant to your day to
day job. You might know something but you are
not sure about it – so you would ask questions.”
Sligo Credit Union Limited.
“I think everybody should do it. I would recommend
it to everyone. There are so many little things that
you would never think of but are so important.”
Celbridge Credit Union Limited.
Module 5: Sales and Member Care
Covers the first principles of marketing, macro and micro environmental
analysis, marketing planning and budgeting, member service, handling
member complaints.
Module 6:
Option 1: Credit Union Insurances
Covers the types of member financial need, legal and regulatory principles
of Insurance, Payment Protection Insurances, General Insurance Policies
– Home, Motor & Travel and introduces Mortgages and Pensions.
Option 2: Strategic Planning & Business Development
For those already with an insurance MCR you may wish to take one of the
other elective modules such as Strategic Planning where you will examine
the strategic planning process and the practical application of the tools
and techniques that aid strategic analysis, formulation, implementation
and project management.
ACCUP
january 2010
The next ACCUP programme
will commence in January 2010
and the training department
is taking bookings through
to December. ILCU is also
pleased to announce that it can
continue its reduction in fees
to €995 to all those who book
onto ACCUP by December
23rd 2009. Your credit union
should by now have received
an ACCUP Information Pack
including schedule and
application form. For further
information please contact the
Training Department:
Phone: +353 1 614 6955
Fax: +353 1 614 6764
Email: [email protected]
Web: www.ilcu.ie
ACCUP Workshop Venues 2009/2010
Antrim
Armagh
Ballyhaunis
Drogheda
Dublin
Edenderry
Bagenalstown
Limerick
Cahir
Cork
ACCUP – The standard for credit union personnel
27
HR Update
employment
law: frequently
asked questions
1. Does an employee have the right to
details in writing of his/her basic terms
of employment?
Current Employment Legislation1 requires
employers to provide employee with a
written statement of certain particulars
of the employee’s terms of employment.
This must be done within two months of
commencing employment.
The Acts apply to any person working
under a contract of employment, or working through an employment agency, but
do not apply to a person who has been
in the continuous service of the employer
for less than one month.
Part-time workers: must also receive
a written statement – irrespective of the
number of hours worked.
28
2. Can the Board of Directors make any
changes required to the contract of employment – and then inform the employees?
Changes to the Contract of Employment
containing the terms and conditions of
employment can only be introduced in
one of two means2:
• Introduced by law
• Introduced by agreement
Neither party can unilaterally decide to
change the employment contract.
Any changes made to the contract of
employment must be issued in writing to
the employee within one month of the
change being made.
3. Are volunteers involved with the credit
union covered under current employment
legislation?
Employment legislation does not apply
to non-employees of any organisation
and therefore does not cover those credit
union personnel who work for the credit
union on a voluntary basis.
From a people management perspective, a credit union should have in place
a volunteer policy which covers areas like
volunteer rights, volunteer responsibilities, standards of acceptable behaviour,
conflicts of interest, credit union expectations and problem-solving mechanisms
in order that volunteers are clear about
their rights and obligations in the credit
union workplace.
The ILCU has developed a sample
Volunteer Code of Practice and Code
of Ethics available at its website: www.
creditunion.ie.
4. The credit union has a vacancy, and a
volunteer currently involved in the credit
union wants to be appointed. Can the
credit union appoint this individual into
this role without advertising?
Under current employment legislation3
everyone must be given equal access to
Employment. No one person can be discriminated against on any of the nine
grounds identified in the legislation, discrimination is defined as the treatment
of a person in a less favourable way than
another person is, has been or would be
treated in a comparable situation.
Recommended Best Practice
• Follow Recruitment & Selection Checklist – step by step guide through process
• Objectivity is essential
• Advertise all positions
• Ask individuals the same questions at
interview – related to the job only
5. Can the probationary period of a new
employee be extended where that employee has failed to reach an appropriate
standard of skill or has otherwise failed
to satisfy the credit union’s reasonable
expectations?
The probationary period is viewed as an
extension of recruitment and selection
process. It provides an opportunity for
the credit union to assess the performance of an employee in the job and his/
her capability to do the job and for the
employee to fully understand his/her role
and responsibilities.
The fact that there is a probationary
period must be specified in the contract
in addition to the length of the probationary period.
Regular reviews should be carried out and
the employee may be given notice that the
probationary period is being extended,
however the total period should not exceed
nine months for a full time employee.
6. If a full-time employee requests to work
part-time does the credit union have to
comply with the request?
If an employee wishes to move to parttime work, he/she must apply to the credit
union in writing4.
All applications should be discussed
with the employee in terms of their personal needs and the credit union’s needs.
The credit union will treat all requests
seriously and will explore where possible
how the request can be accommodated.
The suitability of the application will be
determined by objective criteria, such as
the nature of the role performed by the
particular employee, service provision to
members and the business needs of the
credit union.
Once the application has been received,
considered and discussed, the applicant
will be informed of the credit union’s
decision within a reasonable timeframe.
If the request is unsuccessful, the Manager
will inform the applicant of the grounds
for refusal. Every effort will be made to
facilitate the employee’s request.
7. In this economic climate can the credit
union impose a pay cut on the employees
in order to control costs?
No pay cut can be imposed on an employee
without their specific written consent (See
question 2).
In the absence of consent and without
consultation or any form of negotiation
with employees, an employee could:
• resign and claim constructive dismissal;
• claim breach of contract before the
High Court, or;
• bring a claim under the current legislation5 asserting that the reduction in
salary constituted an unlawful deduction from his/her wages.
8. One of the employees is not performing; can the credit union use the fact that
they need to save costs as a reason to make
him redundant?
Specific rules apply regarding redundancy
and apply primarily to the areas of:
• Selection for redundancy
• Alternative employment
• Notice Periods
• Calculation of redundancy payment
Redundancy arises where a person’s job no
longer exists for any one of a number of
reasons: a closure, a transfer of a business,
restructuring, for example. Remember, it is
the role in question that is made redundant
– not the person. Their employment is
terminated by reasons of redundancy.
If the credit union finds itself considering this course of action they should
consider what alternatives may be used6
and they must get specific HR advice/assistance.
For additional information, please
contact the ILCU HR Department:
Margaret Davern, [email protected]
Clair O’Reilly, [email protected]
Jenny Grogan, [email protected]
¹ Terms of Employment (Information) Act 1994
and 2001 (ROI) and the Employment Rights
(Northern Ireland) Order 1996 (NI)
² Ibid
3
Employment Equality Acts 1998 to 2007
(ROI) and For further information on
employment equality matters, visit the Equality
Commission website: www.equalityni.org
4
Protection of Employee (Part Time Work)
Act, 2001 (ROI) and The Part-time Workers
(Prevention of Less Favourable Treatment)
Regulations (NI) 2000 (NI)
5
Payment of Wages Act, 1991 (ROI) and
National Minimum Wage Act 1998 (NI)
6
See the HR Publication: ‘Controlling
Employment Costs’, issued to credit unions
in October 2009)
29
Social
Media
The Choice of a
New Generation
It’s not news to anyone that communication channels have
changed radically over the last number of years. While this
might be accepted by the majority, have we really processed
how this change impacts on credit unions as we strive to reach
out and connect with the communities in which they operate.
Social media encompasses new and emerging ways
people can build relationships and interact with
each other on the Internet. Social media are online
communications in which individuals shift between
the role of audience and author. To do this, they use
software that enables anyone to post, comment on,
share content and to form communities around shared
interests. Examples of social media would include social
networking sites (e.g. Bebo, Facebook, Twitter etc.),
blogs, online forums (e.g. boards.ie) video sharing
sites (e.g. YouTube) etc.
Social media is a distant relation of the traditional
media formats with which we are most familiar. The main
differentiating factor is that it allows for instant two-way
communication between the author and the audience.
In fact, the boundaries between the messenger and
recipient is disappearing as well as a blurring of the
line between content and advertising. People are no
longer consumers of news and current events – they
are conduits and creators as well.
While social media may be of tremendous benefit to
organisations as it allows for a high level of interaction
and direct feedback on product or service offerings,
it also presents a number of challenges which must
be managed to ensure a positive outcome for credit
unions considering using social media to promote
their message.
30
So how important are social media websites in
Ireland today? The growth of social networking has been
explosive, with the proportions who engage more than
doubling from 11% last year. Latest TGI data shows
that 23% of adults in Ireland use social networking
sites, compared to 17% in Northern Ireland. Dublin
has the highest proportion of social networkers at 33%
of the population, whilst the west of Ireland has the
lowest at 12%. Adults aged 15–24 are more than two
and a half times more likely than the average to use
social networking sites regularly. An analysis of the ten
most popular websites in Ireland reveals that five out
of the ten (Bebo, Facebook, YouTube, MySpace and
Wikipedia) are social networking/social media sites.
Bebo is the most popular networking site with over
850,000 visitors, followed by Facebook with 800,000.
Just under half a million adults – 14% of the population are visitors to both sites. MySpace is rather less popular,
with around 300,000 visitors. YouTube outperforms
all of the networking sites, with 1.3m visitors (nearly
40% of the population), underlining the popularity of
watching video online.
The proportion of Irish adults online continues to
rise, from 69% in 2008 to 76% today. Compared to
its Western European counterparts, Ireland performs
well. In France, 69% of the country are online, in
Germany the figure is 57% and in Spain 54%. Ireland
continues to lag behind the rest of Europe in broadband
penetration.
For the latest information
on promoting the credit
union to the youth market,
log on to www.cu4youth.ie.
The Power of Social Media
Intelligent use of the new social media was central to the
success of Barack Obama’s bid for the US Presidency.
When he was going for the democratic nomination he
was the underdog, he didn’t have a huge budget, and
he relied very heavily on social media to mobilise people.
The Obama team set up a blog, gave it prominence on
the campaign website, and updated it several times
daily from locations. Yet another brilliant example of
how to use social media can be seen in the campaign’s
YouTube site. In the era of full video-on-demand, Obama
was fully aware that every last nuance, every turn of
phrase would be up for analysis, and made sure that
every sentence of every speech was soundly based
on faultless fact. What’s more, every speech went on
his YouTube, giving the masses worldwide even easier
access to his message.
Closer to home, the power of social media was
amply demonstrated earlier this year when the Leaving
Certificate English Paper Two was mistakenly distributed
instead of English Paper One at St Oliver’s Community
College in Drogheda. Within minutes of the exam ending,
details of the leak were splashed across internet forums,
social networking sites and blogs.
A recent report entitled ‘Credit Unions and Social
Media’ produced by Ben Rogers, Driver of CU Tomorrow,
Filene Research Institute highlighted the importance
of credit unions embracing social media:
“For credit unions trying to attract and deepen
relationships with younger members, the opportunity
is clear though not necessarily simple to exploit: Young
adults as a whole are far more likely than other online
groups to use social media technologies. Credit unions
that can insert themselves effectively into the social
media mix of young adults stand to build more lasting,
loyal, and profitable relationships.”
Bishopstown Credit Union Limited has attempted
to embrace social media by creating a presence on
Facebook, Bebo and Twitter. Much of the work in
developing the pages was carried out by a student
placed in the credit union on work experience.
According to Sinead Dunne, Business Development
Officer with Bishopstown Credit Union Limited
the key aspect of using social media sites is to
provide value. She noted that in order to appeal, the
content must be relevant, timely and of interest to that
target audience.
“With two colleges within our common bond area,
the use of social media is important for us. Without
a presence on the campus of either college, it can
be difficult to get our message through to third level
students. Our experience using social media sites
has been quite positive. Setting up the sites can be
done quite quickly but the critical part is finding the
time to maintain and update the sites with information
likely to be of interest to the target audience. With the
introduction of our DEBIT card, we feel students would
benefit from finding out more about their local credit
union and that there are alternative organisations out
there for their personal finance needs.”
The credit union use Twitter to provide updates on
the latest developments within the credit union such
as the launch of the credit union’s scholarship awards
for 2009. The Twitter page has attracted 74 followers
and the credit union are keen to build upon this.
According to Sinead, “The initial feedback on the
Twitter page has been positive. We find it helped to
disseminate information on our annual scholarship
and this led to an increase in enquiries. It’s given us
something to build upon and helps us to communicate
with young people using channels with which they
are most familiar. Using social media takes time and
the initial response has shown us that it is worth the
time outlay.”
‘If the news is
that important,
it will find me’
College Student
31
News Roundup
Winter 2009
Donegal Town CU gets
Interactive with Local Schools
CU Savers visit
Waterside Primary Schools
The Waterside Credit Union Limited’s Youth Committee, the BT47s,
took the message of saving to primary schools in Waterside recently.
St. Columba’s and Trench Road Primary School pupils heard from
the teenagers in the BT47s on how to save and why it is so important
for the future. The message of saving, The Saving Counts Project, was
created by the BT47s with the support of Owen Crozier of Teaching Fun Ltd and consists of a Sticker Activity Book and a series of
workshops aimed a primary school children. The project encourages
young people to get into the habit of saving on a regular basis.
The BT47’s Chairperson, David Connolly said “The Sticker Activity
Book is a fun, educational way to save for the future and learn about
managing limited funds. We are working with the local primary schools
in the area to promote the value of building a relationship with the
credit union and becoming a regular saver”.
Primary schools in the area are recognising the importance of this
message being delivered by the teenagers and believe the younger
pupils look up to and respect their older peers.
Donegal Town Credit Union Limited, in a bid to help
the local community during these times of cutbacks and
recession, has recently donated Interactive Whiteboards
to seven local schools. These whiteboards change the
way teachers prepare, present, share and save their
lessons. The schools who have benefitted from this
are Scoil Aodh Rua agus Nuala, Donegal Town; St.
Francis National School, Barnesmore; The Glebe
National School, Donegal Town, Abbey Voacational
School, Donegal Town; Scoil an Linbh Iosa,Killymard,
Donegal Town; Inver National School; Gaelscoil na
gCeithre Maistri, Donegal Town. The feedback from
these schools has been tremendous with both teachers
and pupils benefitting greatly. Donegal Town Credit
Union Limited intends to extend this initiative by
donating whiteboards to the remaining eight schools
in our common bond within the next few months.
The Board of Directors of Donegal Town Credit Union Limited
is pictured above presenting a cheque in payment of the
whiteboards to Mr. Danny Gallagher, Managing Director of
MRP Electronics.
Banbridge Celebrate 40 Years
Banbridge Credit Union Ltd recently celebrated
their 40th Anniversary at a reception for Directors,
Staff and Volunteers, in Banbridge Civic Building
hosted by District Council Chairperson Cllr Liz
Ingram. During the event Banbridge President
Gary McMahon (left) and President of the Irish
League of Credit Unions, Mark Bailey presented
Directors John McNeill and Stanley Wilson with
gifts to mark their 40 years service.
32
MPCC Credit Union Launches
its ‘CU Safe to School’
MPCC Credit Union Limited with support from Limerick
County Council, the Road Safety Authority, an Garda
Síochána and Cycling Pursuits has launched its ‘CU Safe
to School’ road safety campaign, which is aimed at helping
primary school children within its common bond learn effective road safety. Every day in Ireland, in excess of 100,000
primary school children walk to school. With so many children
taking to the roads every day to get to and from school, road
safety awareness and education are paramount.
The credit union has sponsored reflective safety armbands
and arranged for the distribution of these along with road
safety leaflets to the local primary school pupils and is also
running a written competition for the children based on the
message contained in the road safety leaflets. The competition
and its prize of a bicycle are intended to act as an additional
encouragement for the children and their parents to read
the safety leaflets.
Foundation Fund Nigerian Project
The ILCU International Development Foundation (ILCUF) have
awarded €5,000 to a St. Vincent de Paul project in Nigeria after
assessing a written proposal under its funding criteria, which was
identified by Clonmel Credit Union Limited as meriting support.
The funds will assist in educating young people and adults to
enable them to work and support their families. Pictured at a
recent Chapter meeting to announce the initiative were:
Back Row: Billy Nash, St. Vincent de Paul, Kathleen Halpin, Community
Liaison Office, Clonmel Credit UnionLimited , Brian Mourdant, St. Vincent
de Paul, Monica Hillery, St. Vincent de Paul, Eamon Griffin, St. Vincent de
Paul and Alice Twomey, President, Clonmel Credit Union Limited. Front
Row: John Maxwell, St. Vincent de Paul, Kieron Brennan, CEO, ILCU,
John Mullin, ILCU Board and Alan Moore, ILCUF.
Pictured are MPCC’s Vice-Chairman, Brian Buckley and local
Community Gardai, Ian Murphy and Cathy Cotter along with pupils
from the local primary schools within MPCC’s common bond proudly
displaying their reflective safety wraps.
Torrent Credit Union 40th Anniversary
The Board of Directors from Torrent Credit Union Limited,
at their 40th Anniversary Celebratory Dinner on Friday 16th
October in Quinns Corner, Co Tyrone.
33
Legislative
Update NI
Credit Union Regulation
Credit unions will be aware of the ongoing review of
the legislative and regulatory framework for credit
unions in Northern Ireland. The Committee for
Enterprise, Trade and Investment at the Northern
Ireland Assembly (‘the ETI Committee’) published
a report on this issue in February 2009. The main
recommendation of this report was that responsibility for the regulation of credit unions would transfer
to the Financial Services Authority (FSA) while
the registration function for credit unions would
remain with the Department of Enterprise, Trade
and Investment (Northern Ireland) [DETI(NI)].
A further review of the issue which was conducted by HM Treasury and published in July
2009 recommended that Northern Ireland credit
unions should be brought within the scope of the
Financial Services and Markets Act, 2000 (FSMA),
while leaving the legislative and registration functions within the Northern Ireland Assembly and
DETI (NI).
Following requests made by credit union delegates at roadshows held in March 2009 to discuss
the report of the ETI Committee, the ILCU arranged
a seminar at which representatives from credit unions in Great Britain could share their experience of
FSA regulation with League delegates. This seminar
took place on 14 October 2009 in Cookstown with
Mark Lyonette (Chief Executive of the Association
of British Credit Unions Limited), James Berry
(Bristol Credit Union Limited) and Maureen Travers
(Scottish Police Credit Union Limited) speaking
to attendees about the issue. Mark Lyonette gave
an overview of FSA regulation and the effect on
34
credit unions in GB as a result of the transfer to
FSA regulation. James Berry detailed how FSA
regulation impacts on a Version 1 credit union and
Maureen Travers described what is expected from
a Version 2 credit union when faced with a FSA
visit (known as an ARROW visit). Issues raised by
League attendees included the cost of FSA regulation, the Financial Services Compensation Scheme,
the approved persons regime and the effect of FSA
regulation on smaller credit unions.
The next step in the review is the publication of
a joint consultation paper between HM Treasury
and DETI (NI) to address the potential transfer to
FSA regulation.
Cheque Guarantee Scheme
The Payment Council recently confirmed the end
date for the UK Domestic Cheque Guarantee Card
Scheme to be 30 June 2011. This means that cheques
which were previously guaranteed under this scheme
(the maximum guarantee limit is £250) will no
longer be guaranteed after this date. It appears that
last year only 7% of cheques issued were guaranteed under this scheme and the use of guaranteed
cheques is in rapid decline. As such the effect on
credit unions is likely to be minimal. Insofar as
credit unions accept these cheques they should be
aware that from 30 June 2011 such cheques will
no longer be guaranteed under the scheme.
Legislative
Update ROI
The League has been making ongoing representations to the Department of Finance with respect
to a number of critical issues facing the credit
union movement and to seek legislative change
in a number of key areas. At a meeting held with
the Minister for Finance Mr Brian Lenihan TD, in
October 2009 the following issues, amongst others,
were discussed.
Reform of the Regulatory Structure
In June 2009, the Minister for Finance announced
the Government’s intention to reform the current
regulatory structure for financial institutions by the
establishment of a single fully integrated regulatory
institution, the Central Bank of Ireland Commission. The ILCU has serious concerns that the failure
in banking regulation may contribute to reforms
of credit union regulation. The ILCU has made
representations to the Minister for Finance, as well
as key figures in the opposition parties, that the
issue of the regulation of credit unions is a matter
that should be addressed as part of a wider reform
agenda affecting credit unions as a whole, rather
than in the context of reactive legislation necessitated by regulatory failures affecting the banking
sector. This would require the maintenance of the
current regulatory arrangements for credit unions
within any new structure on an interim basis, pending more substantive reforms.
The ILCU has also requested that a Credit Union Review Group be established to consider the
reform of the legislative and regulatory framework
for credit unions which would have agreed terms
of reference and appropriate resources to produce
a new structure for the regulation and operation
of credit unions in the Republic of Ireland and to
provide such interim reports on pressing issues as
may be required. It is proposed by the ILCU that
such a group should comprise of representatives
of the credit union movement, the Department of
Finance, the Registrar, legal expertise and community stakeholders. In particular credit union
representation should be reflective of the overall
membership structure of the movement in Ireland
with proportionate representation for the ILCU.
Central Liquidity Mechanism
Earlier in the year, the ILCU approached the Department of Finance with its views around how the
credit union movement could meet its own liquidity
requirements via an appropriate Central Liquidity
Mechanism (CLM)
However, a draft Heads of Bill recently published
by the Department and the Regulator, envisages a
state run scheme, with mandatory participation
for credit unions and a corresponding levy. This
proposal is not acceptable to the ILCU.
The ILCU has communicated its concerns to the
Department and has requested that the Minister
confirm that a liquidity mechanism will be established to allow credit unions meet their liquidity
needs in a manner that recognises the role, function
and nature of the credit union movement and the
needs of members.
35
ILCU financial Data review WINTER 2009
Summary
The European Central Bank reduced its base interest rate by 0.25%
to a new record low of 1.0% in May 2009 and has maintained it at
that level through October 2009.
At their October 2009 meeting the Bank of England maintained
the official bank rate at 0.5%. The rate was reduced by 0.5%
at each of the February and March meetings. The rate has been
reduced from 5% in September 2008 through a series of rate cuts
since October 2008.
The loan to asset ratio for credit unions in the Republic has begun
to fall again and has now dipped below 50%. The overall trend for
credit unions in Northern Ireland is that the Loan to Asset ratio is
also falling and now stands at 52%.
Credit unions in the Republic of Ireland experienced a decline in
their total loans outstanding for quarter ended June 2009 of 3.3%.
However, credit unions did outperform the credit market in general
which contracted by 8% over the same period.
At 4.3% for the quarter ended June 2009 the rate of growth in the
savings market in the Republic is now higher than the rate in the
growth of credit. Credit union savings grew by 1.3% in the same
period.
The market for credit in Northern Ireland decreased by 2.03%
in the 9 months of the credit union year to June 2009 despite the
series of rate cuts by the Bank of England. The performance of
credit unions was broadly comparable to the market as total loans
outstanding for Northern Ireland credit unions decreased by 0.8%
in the same period.
The Savings market in Northern Ireland experienced growth levels
of 2.02% for the quarter ended June 2009 and credit unions are
outperforming the market, with credit union member savings
growing by 8.3% in the same period.
36
I nterest R ates
This section of the bulletin looks at the
indicators in the financial market place,
interprets them to assess future trends to
assist credit unions in the planning process
and support decision-making in key areas
such as loan interest rates, savings rates
and investment decisions.
Northern Ireland:
At their October 2009 meeting the Bank of England
maintained the official bank rate at 0.5%. The rate
was reduced by 0.5% at each of the February and
March meetings. The rate has been reduced from
5% in September 2008 through a series of rate cuts
since last October.
The Monetary Policy Committee outlined that
while there were differences of view among members of the Committee on the balance of risks to the
medium-term outlook for inflation, and how it had
shifted in recent months. All Committee members,
however, agreed that recent developments were not
sufficiently compelling to justify revising the target
level of asset purchases that had been agreed at
the August meeting or to change the level of Bank
Rate at this meeting. The forecast round ahead of
the November Inflation Report would provide an
opportunity to assess more fully how the mediumterm outlook for activity and inflation had evolved
since August.’
Republic of Ireland
In May the European Central Bank cut its main
lending rate by a further 0.25%, down to a new
record low of 1%. The widely expected cut was
the seventh by the ECB in just eight months and
meant that it had reduced its main lending rate by
3.25% since October 2008.
At their October meeting the European Central
Bank kept its main interest rate steady at the record
low point of 1% after a meeting of its governing
council in Venice. No change had been expected.
ECB president Jean-Claude Trichet told reporters
the latest information supported the bank’s view
that the euro zone economy was stabilising, though
uncertainty remained high and any recovery would
be ‘uneven’. He also said the euro zone inflation rate
was expected to turn positive ‘in the coming months’,
having been slightly negative in September.
Economists believe the bank is waiting for signs
of a sustained recovery in the euro zone before
unwinding a series of stimulus measures.
Loans to A ssets
Based on the Prudential Returns the overall
trend for credit unions in Northern Ireland is that
the loan to asset ratio has largely stabilised. The
loan to asset ratio for credit unions in the Republic
has begun to fall again and has now dipped below
50%. As a result the movement average is now
below 50%.
The table below is base on the Prudential Return
data.
Loans:
Assets
Jun
08
Sep
08
Dec
08
Mar
09
Jun
09
Republic
50.05
50.60
51.16
50.34
48.87
Northern
55.51
55.45
54.60
52.06
51.85
Movement
50.27
50.71
51.31
50.41
49.00
C redit M arket
This section of the bulletin looks at
current trends in the loan markets in the
Republic of Ireland, Northern Ireland and
the performance of credit unions relative
to the market trends.
Republic of Ireland
The credit market in the Republic contracted in
the first quarter of the credit union year. In the
quarter ended June 30th 2009 the level of debt held
by households fell from €148.3 billion in September 2008 to €136.44 billion in June 2009. This
represents a fall of 8.02%. The vast bulk of the
decrease is explained by the reduction in outstanding house finance.
Credit unions experienced a decline in their total
loans outstanding for the same period to end of June
2009 of 3.3%, however given that the market as
a whole contracted by 8.02% this may be viewed
as a positive performance. 80% of credit unions
experienced growth in loans equal to or greater
than the market performance.
When assessing credit union performance relative
to the market PEARLS Ratio S1 is used.
37
ILCU financial Data review wINTER 2009
C redit U nion R ates
The survey on credit union loan rates indicated that the
average standard loan rate charged by credit unions
was 9.95% (10.5% APR). The lowest standard rate
charged by a credit union was 6.7% APR while the
highest was the legal maximum 12.68% APR.
To assist credit unions in setting the appropriate
interest rate for loans a selection of current APRs
and credit card rates from other institutions are set
out below.
Current APR Rates
Institution
€
Var
APR
Fixed
APR
AIB
<2,500
12.07%
—
<2,500–5k
11.47%
—
5–10k
9.94%
—
10–15k
9.19%
—
15–20k
8.40%
—
20–25k
7.96%
—
25k+
7.46%
—
BOI
Personal
PTSB
5 years
Acc
Average Credit and Loan Interest Rates,
Apr 2008–March 20091 (NI)
Date
Credit
Cards
Overdrafts
Personal
Loans
Oct
15.58%
18.04%
11.66%
Nov
15.59%
18.05%
12.02%
Dec
15.58%
18.04%
12.08%
Jan
16.09%
18.02%
11.96%
<1k
13.4%
12.0%
999–5k
11.9%
12.0%
Feb
15.72%
18.63%
11.97%
5–10k
11.9%
11.5%
Mar
15.73%
18.63%
12.15%
10–15k
11.7%
11.0%
Apr
15.72%
18.62%
12.13%
15–20k+
11.1%
9.7%
May
15.89%
18.61%
12.04%
18.97%
12.25%
20k+
11.1%
9.6%
Jun
15.89%
2.5k–5k
12.5%
—
Jul
15.86%
18.97%
13.13%
5k–9k
10.90%
—
Aug
15.89%
18.97%
13.18%
9k+
10.60%
—
Sep
15.89%
18.97%
13.18%
6k–10k
—
12.5%
10k–20k
—
11.9%
20k+
—
11.9%
—
11.46%
—
Ulster
Fixed
Northern Ireland
For the first nine months of the credit union financial year ended June 30th 2009 the credit market
decreased by 2.03% despite the rate cuts by the
Bank of England. The performance of credit unions
was somewhat better than the market for unsecured
credit as credit unions in Northern Ireland loans
decreased by only 0.8% in the same period from
September 2008 to the quarter ended June 2009.
Of the 97 Northern Ireland Prudential Returns
received for June 2009 64% (62) of credit unions
in Northern Ireland out performed the market
growth rate.
to the market PEARLS Ratio S1 is used.
60 Months
1 Source: Bank of England, Monthly Weighted Average
Loan Interest Rates, Banks & Building Societies, (IUMCCTL,
IUMODTL, IUMPLTL)
Credit Card Rates
38
Institution
APR on
Purchases
APR on
Cash
Ulster Bank
17.9%
22.9%
BOI Clear
9.5%
19.9%
BOI 2 in 1
13.9%
17.4%
PTSB ICE
13.5%
16.9%
AIB Be
AIB Click
18.15%
23.4%
8.5%
23.4%
EBS
10.9%
12.6%
Car Loans
To assist credit unions in planning development of
the car loan segment of their Loan Portfolio this
section of the bulletin analyses the current trends
in the car market in the Republic of Ireland. The
focus of this section is:
• to outline current trends with respect to new car
purchases; and,
• to assist in determination of an appropriate loan
interest rate by illustrating current rates offered
by other institutions.
Northern Ireland
The market for new cars in Northern Ireland has
also experienced falls in sales. In the six months
from January 2009 to June 2009 there were 22,936
new private cars licensed, this is a fall of 40% when
compared against the same six months in 2008.
Special Rate Car Loans
103 credit unions out of the 362 which completed
the survey on loan interest rates offered a special
car loan interest rate. The Average Nominal Interest Rate applied was 7.11% and the average APR
Car Registrations
was 7.38%. The lowest APR applied was 5.1%
There were 2,272 new private cars licensed in Sep- and the highest was 10.2%. 39 credit unions (out
tember 2009, compared with 4,364 in September of 103) paid an interest rebate; the average rebate
2008, a decrease of 47.9%.
paid was 12%.
Selected current rates on offer in the Car Loan
Percentage change on prior year in New Car
Market are set out below to assist credit unions in
Registrations Jan 2009–Oct 2009 ROI2
setting target rates for car loans.
Selected Car Finance Rates (ROI)
Institution
€
Var
APR
Fixed
APR
AIB
5–20k
8.42%
8.01%
20k–60k
—
9.52%
<4,999
13.7%
10.9%
<9,999
12.1%
9.9%
<14,999
12.7%
9.9%
<19,999
11.9%
10.0%
>20k+
11.4%
9.7%
BOI
2 Source: Central Statistics Office, New Vehicle Registrations.
Monthly growth- cars registered by province ROI Jan 09–Sep 09
Connacht
Leinster
Munster
Ulster
39
Savings M arket
This section of the bulletin looks at the
current trends in the savings market in
the Republic & Northern Ireland, the
performance of credit unions relative to
the market trends and current rates on
offer from other institutions.
Republic of Ireland
The savings market in the Republic is now growing at a faster rate than the credit market. Also the
savings market grew by more in the first half of this
year than the whole of the previous year, growing by
2.87% in the first 6 months of the year as against
2.01% for the year ended September 2008. This
trend has continued in the quarter ended June 2009
as the growth in savings market was 4.28%.
The growth rate of savings in credit unions for
the same period to the end of June was 1.3%,
however, 23% of Republic of Ireland credit unions
experienced growth in savings that was equal to or
exceeded the market growth rate.
to the market, PEARLS ratio S3 growth in total
member resources is used.
The average dividend paid by credit unions in the
Republic of Ireland for the year ended September
2008 was 1.78% down from an average of 2.12%
at year end 2007. To assist credit unions in assessing
competing products available to members a chart
of rates available from other institutions is set out
below. It is important to note that with all of the
products terms and conditions do apply and as the
table clearly illustrates the interest earned depends
on the amount saved in the account. This differs to
the approach taken by credit unions who reward
all savers at the same level regardless of the size of
their shares.
Selected Deposit Rates % (ROI)
Institution
Inst.
7 Day
1 Mth
3 Mth
6 Mth
ACC
Inst.
7 Day
1 Mth
3 Mth
6 Mth
INBS
0k–10k
0.01
–
0.01
–
–
5k–25k
3.75
–
–
–
–
10k–25k
0.01
–
0.01
–
–
25k–50k
2.5
–
–
–
–
25k–50k
0.01
–
0.01
–
–
50k–100k
2.5
–
–
–
–
50k–100k
0.01
–
0.01
–
–
100k+
2.5
–
–
–
–
100k+
0.05
–
0.05
–
–
EBS
0–5k
0.03
–
0.03
–
–
0k–1k
0.01
0.01
0.01
0.01
–
5k–25k
0.03
–
0.05
–
–
1k–10k
0.01
0.01
0.01
0.01
–
25k–50k
0.03
–
0.20
–
–
10k–32k
0.01
0.01
0.01
0.01
–
50k–100k
0.03
–
0.30
–
–
32k–64k
0.01
0.01
0.025
0.01
–
100k+
0.03
–
0.60
–
–
64k–127k
0.02
0.01
0.025
0.05
–
PTSB
0.025
0.025
0.050
0.25
–
0–3k
–
0.02
–
–
–
3–5k
–
0.15
–
–
–
AIB
127k+
An Post
0–30k
1.00
–
3.00
–
–
5–50k
–
0.20
–
–
–
30k+
1.00
–
3.00
–
–
50k+
–
0.30
–
–
–
1.50
1.60
1.75
–
–
BOI
1–1m
2.00
–
–
–
–
0–5k
0.01
–
–
–
–
1m+
2.00
–
–
–
–
5k–100k
0.01
–
–
–
–
Ulster
100k+
0.03
–
–
–
–
U 1st 0+
0.01
–
–
–
–
3k–10k
0.01
–
–
–
–
10k–30k
0.01
–
–
–
–
30k–125k
0.01
–
–
–
–
Anglo
1k+
RABO
F. Active
40
Institution
0k–60k
0.01
–
–
–
–
60k–100k
0.01
–
–
–
–
100k+
0.01
–
–
–
–
Direct
Northern Ireland
The Savings market in Northern Ireland had been
experiencing good levels of growth significantly
above the growth in debt levels. However, this has
now changed due to the interest rate cuts by the
Bank of England. In the first nine months of the
credit union financial year from October 2008 to
June 2009 the savings market grew by 2.02%.
Credit unions performance was again well ahead
of the market as savings in credit unions grew by
8.3% in the same period.
Overall of the 97 Northern Ireland Prudential
Returns received to date for June 2009 92% (89) of
the credit unions in Northern Ireland out performed
the market growth rate.
The growth in credit union savings was measured
using the PEARLS ratio S3.
The average dividend paid by credit unions in
the Northern Ireland for the year ended September
2008 was 3.01%.
To assist credit unions in assessing competing
products available to members a chart of rates
available from other institutions is set out next.
This Financial Data Review
analyses current internal and
external data to support the
strategic and business planning
process in credit unions. Inclusion
of updated data will occur in
subsequent Financial Data Reviews.
Primary sources for the data used
in this review are reports from
the Central Bank and Financial
Services Authority of Ireland,
the Bank of England, the Central
Statistics Office, the Department
for Regional Development (NI)
and the ILCU Prudential Returns.
Average Deposit Rates, Oct 08–Sep 09, (NI)3
Date
Demand Bank
& B. Soc
Term Bank
& B. Soc.
Oct
2.39%
3.03%
Nov
1.68%
2.30%
Dec
0.49%
0.90%
Jan
0.21%
0.36%
Feb
0.16%
0.17%
Mar
0.19%
0.17%
Apr
0.16%
0.36%
May
0.17%
0.22%
Jun
0.17%
0.23%
Jul
0.17%
0.24%
Aug
0.17%
0.43%
Sep
0.17%
0.43%
3 Source: Bank of England Monthly Weighted Average Deposit
Rates, Banks & Building Societies (data codes IUMTHAK,
IUMWTTA)
41
Research & Development Contact:
John Knox, Business Analyst
Tel: +353 1 614 6787
Email: [email protected]
Commentary
The data from the 456 Prudential Returns included in the June movement results shows
that the percentage of the movement’s assets that are held in investments increased
again from 45.73to 47.35%. This was due very obviously to the continuing decline
in credit unions loan portfolios. In the first nine months of the credit union financial
year from October 2008 to June 2009 the movement’s total assets fell by 0.5% (an
improvement as assets had fallen by 1.1% to March 2009). Data from the Annual
Returns showed that the asset growth of the movement had slowed to 9.8% for
the year ended September 2006, and fell to 3.9% for the year ended 2007. The most
recent prudential returns underline the fact that the downward trend in asset growth
is continuing.
The loan portfolio in Republic of Ireland credit unions shrunk for the quarter ended
June 30th 2009 but credit unions are outperforming the market in general which
contracted as banks have cut back on their lending, particularly mortgage finance.
Loans in Northern Ireland credit unions also decreased slightly, but by less than the
credit market in general in Northern Ireland.
• Interest rates have now stabilised in both jurisdictions as the world’s central banks
are operating in a concerted manner and trying to kick-start the world economy.
Rates have bottomed out as there is little scope for either the Bank of England or the
ECB to cut rates much further given that they are already at historic lows. However,
a trend is emerging whereby even in the absence of rate rises by the ECB some banks
are raising their lending and mortgage rates to increase their net margins.
• In 2008 many institutions offered deposit rates in excess of those offered by credit
unions. This placed pressure on credit unions to maintain their market share in
terms of savings. However, most institutions are now slashing their rates on demand
deposit accounts and credit union rates now compare favourably with the market in
general. Credit unions compare exceptionally well with the deposit rates which are
being offered for on demand money as banks are typically paying 0.01% on demand
deposit accounts.
• The Irish economy remains in a recession and this will in time present its own
challenges/opportunities and difficulties for credit unions especially given the
record number on the Live Register in 2009. Many analysts are now predicting that
over 500,000 people will be unemployed by the end of 2009. Whereas 2009 was
a difficult year for credit unions due to issues around investments it would seem
almost inevitable that loan delinquency will be a major issue for credit unions in
2010 and beyond.
42
competition
TIME!
Win a fantastic
weekend for
two to London
The ILCU are offering a fabulous prize. You can win
a weekend for two to London, courtesy of City Jet.
City Jet the smart way to travel to London, cutting
two hours off the ‘total travel time’ and two nights
B&B at one of the Moran Hotel group’s luxurious
London hotels.
All you need to do is tell us, in 500 words, about a
positive experience you have had with your local
Credit Union. The winning entry and photographs
will appear in the next issue of CU Focus – Spring
2010. Good Luck! Next Stop London!
The closing date for entries is Friday 15th January 2010.
Winners will be announced in the next CU Focus. The judge’s
decision is final and no correspondence will be entered into.
Only one entry will be accepted from each email address.
Please email your entry to [email protected] with
‘CU Focus Competition’ in the subject field.
And congratulations to Mary McCaw-Sexton from Ennistymon & District
Credit Union, Church Street, Ennistymon, Co. Clare. Who is the winner
of the luxury weekend for two in the Malton Hotel, Killarney.
Mary’s winning answer was; ‘Credit unions make a difference because
they’re local, they’re smart but they have a heart’.
43
Over 140 Credit Unions
now use PayPoint to offer a more complete and
competitive service to their members......
• PayPoint helps members to budget and control their finances
• Easy to use, reliable, secure
•
•
•
•
•
Credit Union members bill account is credited the next day
No capital cost - nominal running costs
Commission earned on all transactions
A growing number of bill issuers and County Councils are using PayPoint
Very high satisfaction levels among members who use the service
In a recent PayPoint survey carried out in two
large Credit Unions, 100% of those who have
used the PayPoint service to pay a bill said....
“The service was excellent and
they planned to use it again”
To find out more contact: Yvonne Monnelly or David Walton on 01-8903933 or visit
www.paypoint.ie
PayPoint – the easy way to pay...
Wishing all our readers
a Happy Christmas and
a Prosperous New Year!

Brian O`Driscoll launched as face of Credit Unions

Transcription

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