Students Hampered by Credit Union Changes

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Students across the west of Ireland are being hampered by the implementation of new rules governing Credit Unions by the Financial Regulator following the collapse of the banking sector, according to Deputy Paul Connaughton.

“I have received a number of queries from students trying to organise loans in advance of going back to college who found out that loans were being restricted and that it was taking a much longer period for Credit Unions to be able to issue loans to their customers.

“The issue has already caused great hardship for many students, with September being the most popular month for students seeking loans. I wholeheartedly agree with proper financial regulation over the financial institutions, had we such regulation in the past, our economy wouldn’t be in the mess we are in now, but in my opinion, the need to have the same type of regulatory framework for Anglo Irish Bank, for instance, and ordinary Credit Union transactions, seems to be a bit far-fetched.”

Deputy Connaughton said that he accepted that some Credit Unions had financial problems and there needs to be a strong, robust but sensible level of regulations concerning Credit Unions.

“The core concept of the Credit Union movement, whereby members have to save first by way of shares, before any loan is made available, should always be fostered and naturally there must be regulating checks and balances concerning lending arrangements, but it now appears that some Credit Unions are unable to provide loans on time to bone fide student borrowers with good track records who need small loans for their studies.

“I believe the Regulator urgently needs to look at this level of banking and where at all possible allow Credit Unions to do a job nobody wanted to do for years, to help students to help themselves.”