“MANY consumers will consider switching to credit unions following Ulster Bank’s departure — rather than go to the two big banks”
That’s according to Kevin Johnson CEO of CUDA (Credit Union Development Association):“ It’s unavoidable that some banking customers will be badly hit when Ulster Bank exits the market.
“Unlike other in countries such as Canada and the USA, Irish consumers have an over-dependence on a couple of large national banks and, as a country, we have traditionally underutilised local banking and credit options. But it’s not all bad news for consumers — there are options.
“The level of development in Credit Unions in recent years has been strong. The vast majority of them have substantially modernised their operations and they are now well placed to provide banking and credit facilities to the thousands of personal and business customers impacted today’s announcement.
“While well known for their range of personal loans, most Credit Unions now offer current accounts, business lending, mortgages, Agri-loans, home, life and travel insurance. Reliable and efficient online banking is now the norm and the uptake from members has been strong.
“With strengthened governance controls and growing business lending expertise, CUDA is currently in talks with the Minister for Finance to amend legislation to allow credit unions to co-lend on larger property related and commercial loans.
“While much Ulster Bank’s customer base may end up with the two largest banks, we are confident that many consumers will see that credit unions are well positioned to step in and fill some of the void left behind in the Irish banking sector.”
Trevor Grant, Chairperson, AIMA (Association of Irish Mortgage Advisors) said: “First and foremost it’s important to assure existing Ulster Bank mortgage holders that they have protection under the Consumer Protection Code regarding the current terms and conditions of their mortgage as per their loan offer, so there’s no need for them to worry or panic. One thing to note for borrowers however, is that if a fund buys their home loan, they will not be able to borrow further with that entity and will have to switch provider for additional funds or a new mortgage. However, for many mortgage holders switching to another lender could be a good thing as they may be able to avail of lower rates.”