AGM to hear CU name change proposal

Two events of note are set to occur when Mullingar Credit Union holds its AGM today, Wednesday March 3 – three months later than usual.

The first is that the meeting will be held via Zoom and the second is that a name change is likely to be approved.

“Members are going to be asked to vote on a name change – to the ‘North Midlands Credit Union’,” says Tom Allen, manager.

This, he explains, is due to the fact that since 2014, four credit unions have merged with Mullingar – Castlelost (Rochfortbridge), Kinnegad and District, Castlepollard and, last year, Longford.

The AGM should have been in December, but due to the pandemic that was not possible – and credit unions law did not allow for virtual meetings until new legislation was introduced by the Oireachtas.

“Anyone who wants to attend has to register in advance,” said Mr Allen, and the deadline for registration is this Friday, February 26.

Savings up; loans down

Credit union members saved more than usual and borrowed less than normal in the pandemic, the chairman of the institution, Paul Isdell, will tell members at the AGM.

That, Mr Isdell, points out represents a “pressure”, and it is one that is common to other credit unions: “Two main sources of income for the credit union are interest on members’ loans; and then the surplus monies that aren’t lent out typically would be invested in deposit-type accounts, and because we are now in an environment where deposit rates in many cases are not only zero but there are some negative rates, it is reducing our income stream,” Mr Isdell said.

Other headline points are that the CU generated a surplus of €1,558,000; income was up and the Reserves have now reached €51m.

“Total income for the year was €8.5m, an increase of over €1.1m on 2019,” Mr Isdell said, and members’ savings now stand at €312m, an increase of over €80m from last year, of which €43m arose from the Longford transfer.

Loans to members are just under €82m.

However, Mr Isdell, the credit union is experiencing pressure due to the rise in savings and the fall in borrowing.

While the credit union is actually in some cases having to accept a charge for effectively for having monies on deposit at the moment, Mr Isdell said that there are no plans to charge customers for holding their money.

“Certainly that is not something that we would foresee happening – it’s certainly not on our radar, it’s not something we would be contemplating or foresee happening in the short to medium term,” he said.

His report to the meeting states that in line with Central Bank direction to all credit unions, the board does not propose to pay a dividend or interest rate rebate this year.

Mr Isdell said that for the coming year, the credit union has expanded its loans range in a bid to address the low savings to loans ratio: “We have a mortgage product; we have Cultivate, our agricultural products; and we will be introducing more loan products and developing them over the forthcoming year.”

Reacting to the announcement that Ulster Bank is planning to cease operating in the Irish market, Mr Isdell wasn’t predicting any immediate benefit to credit union business: “From my initial reading of the Ulster Bank situation, it’s something that is going to play out over quite a long time period rather than something that is going to immediately happen.

WOur focus really for the credit union is on providing all the services that a member would expect from a financial institution – we have the loan products we have the current account, we have the debit card and overdraft facilities – so we are looking to make ourselves a viable alternative to the banks.”