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Opening Address at the Irish League of Credit Unions AGM

University of Limerick, 23rd April 2016



It is a great pleasure to be here this morning and to have this opportunity to address the Irish League of Credit Unions Conference. I have had the pleasure of addressing your Conference more than once before and indeed when I was Minister for Arts, Culture and the Gaeltacht.

Tá gulaiseacht na gcomhar creidmheasa ina cuid lárnach d'earnáil na gcomharchumann in Éirinn, agus tá tacar prionsabal leagtha amach acu. Bunaithe ar éiteas a thugann tús áite do na mbaill, agus scrúdaithe in áiteanna ar nós Cheanada, bhí bhur mbunaitheoirí ag iarraidh creidmheasa a chur ar fáil do na daoine is leochailí sa sochaí  ar bhealach maorga. Bhí luach agus tábhacht ag baint le bhur nglúiseacht d'ár bpobail ags d'ár sochaí, agus tá go fóill sa lá atá inniu ann.

[The credit union movement, as part of a significant  co-operative sector in this country, is characterised by a distinctive set of principles. Focused around a member-driven ethos, studied internationally in such places as Canada, your founding members sought ways of providing credit with dignity to the most vulnerable.  Your movement has been and remains of great value and importance to our communities and to our society.]

The history of co-operatives is a long and illustrious one, grounded in a desire for equity within our societies. It is a movement which began its life as an innovative solution to the consequences of the profit driven economic theories of the Industrial Revolution. As groups within communities organised themselves, co-operative societies emerged, growing from strength to strength across Europe during the nineteenth century. The emergence of a new economically viable model, that afford to retain democratic control for those involved, with practical benefits of a return for its members, provided an attractive alternative in the late 1800s and saw the birth of a movement that grows from strength to strength.

It was a movement that would also grow and flourish in  Ireland, with well known figures such as Horace Plunkett, George William Russell (AE) and Father T.A Finlay playing a critical role in its development. The founding of the Irish Agricultural Organisation Society, later to become the Irish Cooperative Organisation Society, was the fertile ground  in which the seeds for the credit union movement were sown.

The birth of the co-operative movement in Ireland was not, of course, without its difficulties. Public opinion was hostile and consumer co-operation initially unachievable. However, the movement gradually succeeded in embedding itself into Irish society and in 1894 the Irish Agricultural Organisation Society was formed.

Like the co-operative movement itself, the credit union movement was the result of innovative thought, a collective will and a real desire to participate in the enabling of positive and far reaching change. It would, however, face new challenges. It was opposed as being a threat to the banking system. I knew its founders in Galway for example, who were not allowed to have notices of their meetings read out at Mass.

So many of those who inhabited the Ireland of the 1940s and 50s lived in the shadows of high unemployment, poverty and emigration. As a society, we must be eternally grateful to the school teacher Nora Herlihy who, witnessing the poverty, poor housing, illness, and malnutrition around her, understood its root causes to include lack of accessibility to credit and poor management of finances, as well as rampant usurious practices and abuses of both illegal and legal money lending. Social Reformers like Nora Herliey saw the power of numbers through solidarity and above all education on credit as household management.

We also, of course, owe much to Tomas O’Hogain who addressed a foundational meeting in December 1953, and spoke of how a credit union would, through allowing individuals economic independence, lead to a more robust and independent Irish economy.

The seeds of the Irish Credit Union Movement had been sown, and the Dublin Central Co-operative Society, based on the co-operative model and with the goal of reducing unemployment and emigration through the formation of worker cooperatives was set up. From those seeds came the Credit Union Extension Service, the Dun Laoghaire Thrift Society and, of course, Sean Lemass’s setting up of a special committee to advise on legislative changes which would help to foster co-operative enterprise in the non farming sectors; a committee whose deliberations would eventually lead to the 1966 Credit Union Act, which became the legal framework of the movement in the Republic of Ireland, a movement which survives and thrives today.

Nuair a bhunaigh Nora Herlihy, maraon le Sean Forde agus Séamus P. MacEoin, Gluaiseacht na gComhar Creidmheasa agus nuair a d'oscail siad an chéad brainse ar Ascaill Dhún Uabhair i mBaile Átha Cliath, seans nár thuig siad díreach cé chomh rathúil i a bheadh sí.

[When Nora Herlihy, along with Sean Forde and Séamus P. MacEoin, formed the Credit Union Movement and established its first branch on Donore Avenue in Dublin City, they may not have realised just what a successful phenomenon it was to become.]

Credit Unions are now a familiar sight in Irish towns, villages and cities.  They are deeply embedded into the life of their communities, and an inspiring example of a democratic model of finance that places the needs of the people, the aspirations of its members and the requirements of the local community at its very heart.

This distinctive ethos, so very different to the business model of more traditional financial institutions, offered shareholders a pathway out of financial difficulty, a means to learn about basic financial matters and, ultimately, empowered them to take responsibility for their own financial affairs.

It is worth reflecting on the fact that as commercial banks were abandoning communities who did not generate sufficient and quick profits, Credit Unions were looking in the other direction, to the needs of communities. It would be an interesting piece of research to compare and contrast the differing forms of sponsorship and the different forms of banking.

Indeed, I have seen at first-hand in many developing countries that lack of access to credit and serious credit constraints continue to disenfranchise so many by limiting the ability to engage in sustainable production-enhancing economic activities  which are critical to the long term reduction of  poverty.  In fact, the Irish Credit Union Movement is to be greatly commended for its involvement, over the last 30 years in assisting developing countries in establishing their own credit unions and other cooperative type organisations.

The Irish League of Credit Unions Foundation was established for the purpose of sharing the success of the Irish credit union movement with similar movements in developing and low income countries. This sharing of expertise and experience at the global level is the very essence of the spirit and ethos of the credit union movement.

The continued relevance of credit unions today was demonstrated recently by the Irish Customer Experience Report 2015. That Report was an impressive endorsement which saw credit unions, when rated across a range of sectors including supermarkets, travel firms, entertainment companies and financial enterprises, ranked first overall in terms of customer experience.  Equally impressive was the Report’s conclusion that the credit unions offer a :

“personalised community approach that is something you simply cannot buy”.

This simple but profound statement, reminds us why, today, we have, worldwide, 217 million credit union members in 57,000 credit unions in 105 countries across the world. I understand that many of those members will be represented at the World Credit Union Conference to be held in Belfast in July. This will be a valuable opportunity for credit unions worldwide to come together on the island of Ireland to share ideas as they continue to adapt to new circumstances in a world reeling from the consequences of unplanned deregulation, irresponsible credit policies, and ever increasing ratios of speculative to productive capital flows exploiting new technologies in real time, and without consideration as to consequences.

The Irish Credit Union movement is, we are all aware, currently going through a period of significant transformation, calling for much discussion and debate, and this conference is an important and timely one.

The theme of this weekend’s Conference ‘Credit Unions – Shaping our own Future’ reflects the reality that the Credit Union movement in Ireland is at an important juncture.  I know, over the course of this conference you will be discussing the strategic review undertaken by the Irish League of Credit Unions and that you will be reflecting on the opportunities for growth it has highlighted.  

Part of your vision for the future is the crafting of a more co-ordinated Movement with a strong central Board and Executive, whilst retaining the autonomy of local Credit Unions. This is a significant challenge and I wish you well in your discussions this weekend, which will be important, with far reaching consequences for your members.  May your philosophy of solidarity, co operation and care guide you. I am absolutely convinced that there is no such thing as any simple binary choice between care and solidarity on the one hand and efficiency, and competition on the other. You can have both. Thar aon dream eile, is féidir libhse and dá thrá a fhreastal.

There can be no doubt that the spirit and ethical code that drove the success of co-operative societies will retain its critical role in the future we must craft, as part of the economic recovery of this country. We know that we cannot go back to doing things in the same way as we did before.  We need new forms of working together that will transcend the shortcomings of our recent experience.  In a new social economy we will need models like the co-operative movement, built on democracy, mutuality and the value of service; models which enable people to work together, pooling their skills, proactively engaging with their community and placing solidarity and the collective welfare above any self serving individualism.

Credit Unions act, at all times, in the interests of their members, looking beyond the interests of the few in order to serve the interests of the many. They have a definite philosophy based on solidarity and are part of a co-operative movement which, at all times, seeks to use the language of participative citizenship, thus ensuring that all its members are respected as active contributors and members. They are never relegated to the passive role of ‘customer’ or ‘client’.  Such an ethos ensures that those who become members of a credit union are not viewed in a way which detaches them from their rights as citizens, or which defines their main purpose as being that of serving a de-peopled economy or any financial system disengaged from the needs of the society in which it operates.

Of course, like all major and valuable contributors to society, the credit union movement is called on to continually evolve, adapt and re-imagine. There can be no doubt that, following the recent enactment of new regulations, you are facing a time of radical change and transformation. You have been presented with a significant set of challenges as you work to position yourselves, hold your ground and, I hope, expand in the wider financial sector, seeking to retain your ethos whilst operating and competing in a changing regulatory environment.

You will be discussing, I read in your programme, how for some credit unions substantial change will be required as they comply with the new requirements of the regulatory framework. How options such as mergers or amalgamations, new alliances and the development of improved technology to better serve the banking needs of your members will need to be balanced against considerations around the traditional role and place of credit unions within our society are all listed for discussion and decision. That is not, I am aware, an easy task.

I do know, however, that you have been working, and are working hard at the moment, to develop solutions in line with the values that have always driven the work of the credit union. You have a great and unique personal loyalty and goodwill from existing shareholders to which you can harness your efforts to evolve in ways which will attract new and younger members, a further generation who will benefit from the values of co-operation and common good which has served Irish society so well, and which has given credit unions their unique and distinctive character. The message of course may need to be recalled and presented in a new way. But the core will always be co-operation in credit providers for collective good rather that for insatiable accumulation.

Indeed I have no doubt that the radical thinking, innovative will and great spirit of humanity on which the Credit Union movement was built will continue to define it in the future.  Like many other areas of Irish society, you have been required to navigate difficult waters in recent times.  As you move forward I have every confidence that you will continue to provide a service built on true participation and shared interest.

May I conclude by acknowledging the work of all those involved in the Credit Union Movement for their commitment and contribution, often on a voluntary basis, to local communities and to Irish society in general.  Your efforts are an inspiring example of how economic viability can be pursued in partnership with social responsibility, bringing into balance the needs of members and the community.

Guím gach rath oraibh agus sibh ag tabhairt Gluaiseacht na gComhar Creidmheasa ar aghaidh, agus tá súil agam go mbeidh an daonlathas, an daimh leis an bpobal agus an fís mór i gcroílár bhur bhfealsúnacht, mar a bhí ag am bhur mbunai

[I wish you well as you begin to write a new chapter in the history of the Credit Union Movement; a chapter which I have every hope will continue to be defined by the democracy, community affinity and great vision that has always for its origins, constituted the spirit of the credit union movement.]

Thank you very much.