A credit union is an organisation of people that save together and lend to each other at an affordable rate of interest.
It is owned by and exists solely to serve its members and is run by volunteers (committees and board of directors) to represent members’ interests.
Each member has an equal say in the running of the credit union, irrespective of how much savings he or she holds. Recent statistics from the Irish League of Credit Unions indicate that about 3 million people in Ireland are members of a credit union, with over 530 credit unions in operation throughout the island of Ireland.
Numbers Required
There must be a minimum of between 15 and 25 members to set up a credit union. If the required amount of people have gathered together, the group should apply to the Irish League of Credit Unions, which will test the feasibility of the union. In doing so, the League will call a public meeting of any interested members of the public, which will be attended by both a Field Officer (for the area) and a member of the board of the Irish League of Credit Unions.
The members of the public who attend the meeting, the Field Officer and the board member will decide if there is potential for a credit union in the geographical area or profession. If the proposed credit union is deemed to be feasible, members are required to start saving and a “study process” begins. This lasts for approximately 18 months. The Field Officer visits the union every three weeks throughout this period to see that the group is capable of running the credit union.
When the study process is completed and the group is successful, the Irish League of Credit Unions applies to the Financial Regulator to seek approval and registration for the new credit union.
Who Can Join?
Everyone is entitled to become a member of a credit union but must have something in common with fellow members – they must either live or work in the same locality (community bond), work for the same employer (occupational bond) or work in the same occupation (associational bond).
You can be a member of more than one credit union if you come within the common bond. If a member ceases to have a common bond (they leave the area or job where the common bond exists), they can continue to save in the credit union and retain their membership and voting rights.
Members Rights
Each member has the right to see how their credit union is being run and how it is performing. Members are entitled to information on the accounts of the credit unions, as well as the names of credit union employees and members on the Board of Directors and committees. However, the credit union staff and voluntary workers sign a pledge of confidentiality to keep the information on individual member accounts private. Members are therefore unable to obtain information on the accounts of fellow members.
Voting
Each member has only one vote, which can be exercised at the Annual General Meeting (AGM) to elect the Board of Directors. The Board then appoints the credit committee. Members at the AGM also appoint the supervisory committee. The supervisory committee’s role is to ensure that the Board of Directors works in the best interests of the members and within the law. The committee checks the books of the credit union and evaluates its operation.
Only members are eligible for election to the Board or committees. They are voluntary positions and holders do not receive any payment.
Every member can put him or herself forward for election to the Board or committees.
How to become a member of a Credit Union
– Once you are within the common bond, you can apply for membership in your designated credit union. Each application must be in writing and accompanied by the required entrance fee and minimum share. You need to present written evidence of your address or place of work to staff at the credit union that you are applying to.
There is an entrance fee of 1 euro to become a member in most credit unions. You will also need to hold a minimum of shares between 1 euro and 10 euro.
Who can apply for a loan – this depends on the rules of each credit union. Usually, any member of a credit union over the age of 18 can apply for a loan. If a member under 18 years of age applies for a loan he/she may need a guarantor for the loan.
You can fill in a loan application form in the credit union office where you are a member.
Some credit unions operate a credit telephone hotline where details of a loan application are taken from the member over the telephone.
In making a loan application for a larger sum (up to 38,092 euro), you may have to meet with the credit committee. There can also be a medical examination involved in making a larger loan application. Some credit unions operate an online loan application facility.
The criteria for loans (amount, repayments, length and security offered) can be discussed with a member of the credit union staff.
Each credit union has its own policy on conditions that need to be met before a loan is granted. Once granted, you are asked to complete a promissory note, which is a legally binding document, in which you promise to repay the loan and to commit to regular payments.
Where To Apply
If you are not already a member, call into your local credit union for more details. Contact details for your nearest credit union are available here, or check your local telephone directory or contact: