Learning Outcomes

On successful completion of this module, you should be able to:
LO1 Evaluate the key lending and credit control principles in a credit union and the
process of good credit assessment;
LO2 Describe the member information that should be obtained and documented
before and after the loan application process, and know the importance of
effective communication skills in the areas of lending assessment and credit
control;
LO3 Analyse the principles and processes of good loan recovery practice including
advising members in arrears, and the rights and obligations of both the
member and the credit union in relation to credit agreements and loan
recovery;
LO4 Describe APR and how interest is calculated on credit union loans;
LO5 Comprehensively understand the types, functions and features of credit union
credit (agreements);
LO6 Reflect on practice and experiences of lending and credit control

1.1 Introduction

Most of us at some stage in our lives will need to borrow money. Today there are a
variety of financial institutions to which we can apply for credit. For smaller purchases,
we might use a credit card or enter into a hire purchase agreement. For larger loans,
such as a house purchase, we will look for a mortgage from a bank or building society.
Credit unions were set up in Ireland at a time when it was far more difficult for the
average person to obtain credit. The credit union is a cooperative, which is
democratically controlled by its members. It works to a set of principles which includes
open membership and the equal treatment of all its members. The concept of a credit
union is that its members save together, and these savings are used to fund loans to
the members of the credit union. The principles and concepts of a credit union are
designed to set it apart from conventional, profit-orientated, credit providers.
In this, first, section of the module, we will examine the development of credit
union lending in Ireland and the principles and ethos that underpin this activity. At the
end of this section, you should:
• Have a greater understanding of the history of lending in credit unions.
• Understand the principles behind credit union lending.
• Understand the concept of Consumer Protection.