Credit unions across the State have secured court judgments of more than €9 million against struggling customers so far this year.
Although the 495 judgements obtained up to the first week of November is significantly lower than the 752 judgments secured last year, the average value of those judgments is rising consistently, indicating that the size of the debt problem for members is worsening.
The figures come as one in four of Irish credit unions find themselves on a Central Bank watchlist, indicating that the regulator has concerns about their position.
Many have already had lending limits imposed on them by the bank to limit the scale of problem loans.
The latest statistics from credit and risk analyst Vision-net indicate Newbridge Credit Union is far from alone among community lenders in addressing a bad-loan problem.
Credit unions have been coming to terms with pursuing bad or doubtful debts and are now among the most aggressive businesses to pursue debtors through the courts.
Bad debt problem
While only a snapshot of the situation rather than a comprehensive overview of the bad debt problem in the sector, the statistics show that the value of judgments awarded to credit unions is on the rise, with the average value now totalling €18,591. That's an increase of 7 per cent on the figure for 2012 and 9.5 per cent ahead of the €16,981 average for 2011.
While each branch has its own credit control policy in relation to how they collect debts, more and more are going down the legal route.
Credit union branches have now secured nearly €35 million in court judgments against loan defaulters over the past three years, including €9.2 million this year.
Finglas Credit Union has been one of the most active credit unions this year, securing 39 judgments so far, nearly double as many as the next lender. Derg Credit Union in Co Clare secured 20 judgments against customers, while St Francis, also in Clare, was third with 19. Those three were also the most active last year in the same order, with Finglas securing 54 judgments in 2012.
The data do not give the number of members in each of the credit unions which, along with other factors, might affect the absolute number of cases taken.
In value terms, Charleville Credit Union has been granted judgments for over €1.2 million this year alone, covering 17 cases – indicating an average default of more than €70,000.
Roscrea Credit Union came in second, securing judgments worth €898,101. Meanwhile, St Patrick's, the ESB staff credit union in Dublin, secured judgments worth €104,468. St Canice's Kilkenny Credit Union secured the highest amount of judgments in value terms last year, totalling €1.36 million.
The biggest single judgment has been for €295,568, awarded to
Monaghan Credit Union
.
Overall, judgments of more than €13 million were secured by credit unions against debtors last year, while the value of judgments obtained in 2011 was €12.7 million.
Earlier this month, Tánaiste Eamon Gilmore confirmed 100 of the 392 credit unions in the country were being examined by the Central Bank on a case-by-case basis. Furthermore, 20 credit unions out of almost 400 have below the legally required minimum level of assets to cover their loans.
The news followed revelations that depositors in Newbridge Credit Union would have lost €1.1 million in unprotected savings if it had not been taken over. Newbridge Credit Union this month received a €54 million Government bailout and was subsumed by Permanent TSB.
According to the Vision-net figures, Newbridge Credit Union secured judgments of €162,350 last year.
A total of 495 judgments were awarded to credit unions so far this year, while 752 were awarded last year. The database says 800 judgments were secured in 2012, as some judgments against couples were treated as two separate judgements, when in fact it was the same debt.
