LIMERICK, Ireland–This country’s credit unions have voted in favor of a “radical reform” plan, but have voted against paying the person who has proposed it.
Management consultant Eddie Molloy had earlier proposed reforming the way in which Ireland’s credit unions operate, urging that the Irish League of Credit Unions move away from being a loose affiliation of credit unions and instead become an “empowered centre.”
As CUToday.info reported earlier, Molloy had urged Ireland’s credit unions to borrow a page for Canada and pool all of the assets of the country’s credit unions to then create a central organization that would act collectively.
Doing so, said Molloy, would allow Ireland’s CUs to combine their €14-billion in assets in order to more effectively compete with banks. Molloy said CUs on the Emerald Isle look to the Canadian model in which there is a federated system with a strong central structure.
There are 334 credit unions in Ireland representing three-million members.
Molloy argued in proposing the plan that the current model does not allow credit unions to tap their collective strength. His recommendations come after being retained by the Irish league of Credit Unions to develop a “transformation plan,” according to the Independent, which said the plan calls for involvement by CUs that belong to a rival trade group, the Credit Union Development Association.
The 1,000 delegates at the Irish League of CUs’ annual meeting voted in favor of the reform after it was presented by Molloy. But The Independent reported that they voted down a proposal to pay €800,000 to Molloy for the work completed so far.
The funding was to come from the league's Special Protection Scheme (SPS), a €100m fund to bail out credit unions at risk of insolvency.
“The vote on funding raises a major doubt about the commitment of credit unions that make up the league to the reform plan, especially as it was also planned to tap the SPS to fund the €5m to €6m cost of the first phase of Dr. Molloy's Advanced Organisation shake-up plan,” The Independent reported.
A spokesperson for the ILCU told The Independent, "While this particular funding motion was defeated, this is not the end of the process and the board will now decide on a date for a special general meeting to discuss and debate the final Advanced Organization (AO) report, and make a decision on costs and funding going forward.”