The Irish Credit Union Movement - A Brief History
This is the story of an idea….a great idea that is helping millions
of people worldwide to lead better lives. In practice it’s simple and, when
properly implemented, its effects can be dramatic. Like most great ideas it
has stood the test of time.
The Irish credit union movement was founded as a result of the efforts
of three dynamic, pioneering and entrepreneurial people namely Nora Herlihy,
from Ballydesmond, a teacher based in Dublin, Sean Forde an employee of Peter
Kennedy Bakers, Dublin and Séamus P. MacEoin from Kilkenny a Civil Servant
working in Dublin.
In Dublin in the 1950’s, they witnessed the effects of high
unemployment: sickness, malnutrition, money lending, hunger, poor clothing,
poor housing, and inevitably, emigration of one parent or of the whole family.
In addition, state unemployment benefits were low and did not last
indefinitely leaving many families in abject poverty.
The founders recognised the root of the problem as lying in the scarce
availability and poor management of money and resolved to identify a system
that would allow people to gain more control over their finances.
How It Began
The credit union movement took an important step forward in its
development with a meeting on December 9th 1953, in the Typographical premises
35 Lower Gardiner St., Dublin. At that meeting, of which Nora Herlihy was
chair, a fuller understanding of what a credit union system might achieve
emerged. Tomas O’Hogain who was at the meeting spoke of the need to cope with
foreign interests and efforts to take over the Irish economy which in turn
might place our independence in danger. In his view a credit union would give
individuals economic independence and responsibility by taking part in common
activities and aims.
Impressed, Nora formed the Dublin Central Co-operative Society Ltd
(DCCS) with Tomas O’Hogain on March 6th 1954. It was set up to create
employment through workers co-operatives and neutralise at their source the
forces which caused emigration. Along with the founding pair the following
signed on; Séamus P. MacEoin, Joseph Carroll, Eugene O’Riordan, Michael
Kavanagh, Desmond McGuigan, Margaret O’Riordan, Matthew O’Neill and Sean
Forde. O’Hogain died soon after the society was registered and his place as
chairman was filled by Séamus P. MacEoin.
A main function of the DCCS was the establishment and development of
productive industry on a co-operative and co-partnership basis. To raise
money, the DCCS founded a member’s savings and investment bank to finance the
co-ops. However, their main aim to attract workers to the movement failed. In
1954 the average worker could be quite enthusiastic about the notion of being
entitled to profits of an enterprise in which he was employed and about
participating in the running of and decision making process of his employment.
However, he had little or no intention of risking any capital of his own for
the purpose of providing a workplace, tools, machinery and raw materials to
enable him to produce goods for which he would then have to find a market
where he could sell them. The new urban co-operators were learning from
failure but they were not deterred by it.
In November 1954 the National Co-Operative Council was set up to promote
non-farming co-ops and to provide a platform for socially conscious clergymen
and others anxious to stress the cultural, spiritual and economic virtues of
co-operative endeavour. Denis Byrne, a member of the council wrote a letter to
the newspapers to point out that ‘the scandal of the moneylender whereby those
who can least afford it are charged the highest rate of interest – is seldom
referred to in learned documents on banking and finance.’ The letter told how
credit unions in the USA protected American wage earners from loan sharks and
it suggested that if the idea was taken up in Ireland it would surely ‘be an
attractive pastime for those who not only believe in the principles of social
and economic justice, but are prepared to work a little to foster them.’
Help From Abroad
Nora Herlihy replied seeking assistance from others willing to take
up the challenge. The response was encouraging and it included well wishers
from abroad. CUNA sent information material and introduced her to the
Treasurer of Humble Oil Co Employees Credit Union, Mr Joseph Collerain, who
was holidaying in Ireland from Texas, USA. He met members of DCCS and the
National Co-op Council and told his Texas success story. Nora studied the
results of credit union type organisations and got extra literature to work on.
Under the influence of The National Co-Operative Council the DCCS became
a Co-operative information service. Nora was asked to form a sub committee to
examine the whole structure of credit unions. The sub committee of the council
also included Sean Forde, Séamus P. MacEoin and Muriel Gahan of the Irish
Countrywomen’s Association and Country Markets.
From now on, the roll on effect was impressive. A meeting of minds took
place at the Daonscoil (folkschool) in Red Island, Skerries in 1957. The theme
was co-operation and the week long event organised by the Council was opened
by the then Taoiseach, Mr de Valera. The Daonscoil provided the encouragement
to the small band of credit union enthusiasts who now felt the time had come
to turn theory into action.
Credit Union Extension Service
As a result of the Daonscoil, a few months later in September 1957,
within the structure of the Council, the Credit Union Extension Service was
born (CUES). CUES was established to review and co-ordinate the various
activities in progress and to stage promotional talks. CUES was the launch pad
for the credit union in Ireland. Its central figures included four women, a
reflection of the powerful and often prominent role of women in ensuring the
movements success from the beginning.
The CUES first ladies were Nora Herlihy, Muriel Gahan, and sisters
Aingeal and Eileen ni Bhrion ably assisted by three of the movements male
missionaries; Séamus P. MacEoin, Sean Forde and Tomas MacGabhann. Their host
was the ever helpful Breandain O’Cearbhuill, who provided the accommodation
for the meetings.
Ms Gahan renowned for her work with the Country’s Markets Co-op, run by
the ICA, recalled in an interview in 1979, one of those early meetings: ‘Of
course, the leading spirit was Nora Herlihy. We had no money and I said, we in
the ICA will give you some from the Country Shop…£5, I remember; and this was
the only money we got from anybody’.
Fire Side Chats
CUES gained much knowledge from close association with Muintir na
Tire under Canon Hayes of Bansha. The good Canon’s ‘fireside chats’, a
persuasive blend of Christianity, culture and co-operation, offered something
worth thinking about in the days when television was a freak of nature over
Dublin, and electricity, a magic lantern in the homes of townfolk. It was a
tactic adopted by many in the promotion of the credit union idea.
The First Credit Unions
In 1956 a government sponsored savings campaign prompted a
co-operative in Dun Laoghaire, Co. Dublin, to set up a thrift society. When
the campaign fizzled out the society was left with the problem of what to do
with its members’ savings. On the advice of CUES it was reformed as the Dun
Laoghaire Borough Credit Union – the first in Ireland.
At its inaugural meeting it had thirty members whose common bond was
membership of the co-op and business opened with the transfer of £80 from the
thrift society to a credit union account in a local bank. Lieut. Col. Michael
Quinlan was Treasurer and Mr Hill was Secretary. Owing to military duties
Lieut. Col. Quinlan could not attend all weekly meetings and the work of
Treasurer was carried out by Mrs Gladys Guinan. Dun Laoghaire Borough Credit
Union did not register with the Registrar of Friendly Societies prior to the
signing of the Credit Union Act in 1966.
In the city, meanwhile, the ni Bhrion sisters, Aingeal and Eileen –
admirers of Canon Hayes, were arranging fireside chats to spread the message
among their neighbours. The fruit of their endeavour was Ireland’s first
residential type credit union…..Cumann Muintir Dun Oir. In an interview
recorded in 1979 Aingeal ni Bhrion (Conway) said “Around December 1957 we
were nearly ready to form our Credit Union…..one thing in the early days – we
had more women interested than men. The first man interested was the Chairman
of Donore, Mr Lawless.” She continued “We went around from door to door to
tell people we were starting a credit union and holding a meeting in March. By
that time a few more men had shown interest in assisting us. I think 54 came
to the meeting. The sum of £5.12.6 in entrance fees at 2/6 each was taken
in…..”
The inaugural meeting was held at the home of Mr & Mrs Lewis Lawless, 38
Hamilton Street in April 1958. Mr Lewis was the first Chairman, Oliver Hogan
was Treasurer and Aingeal ni Bhroin was Secretary. The first weekly collection
yielded £7. The credit union was officially registered as a Friendly Society
entitled Cumann Muintir Dun Oir in August 1958.
Credit Union Legislation
In the delicate early stage of its development the movement was
given yet another boost by and old friend from the National Co-operative
Council, Sean Lemass, who was Minister for Industry and Commerce when the
first credit unions were established. In December 1957, he set up a special
committee to advise on legislative changes which would help to foster
co-operative enterprise in the non farming sectors. Nora Herlihy was appointed
to serve with twelve men. The deliberations of this committee were to form an
important part of the process that led to the 1966 Credit Union Act, now the
legal framework of the movement in the Republic of Ireland.
To the Country and Northern Ireland
After the formation of the first two credit unions in Dublin, the
movement soon spread to the provinces; the third was in Clones, Co. Monaghan
where it began as a study group led by a schoolteacher-priest, Rev Patrick
Gallagher. Rev Patrick Gallagher was to become a major figure in the
movement’s development in Northern Ireland. The study group was formed in
September 1958. In March 1959 the Monaghan Trades Council held a meeting at
which Nora Herlihy, Séamus P. MacEoin and Major General Costello spoke.
Another meeting in June 1959 was organised and again Nora Herlihy spoke to
gathered audience. The study group transformed into a credit union in December
1959 when its nine members subscribed £4 12s towards the venture.
Then it was back to Dublin. Civil Service Credit Union was founded in
January, 1960. It was organised by Séamus P. MacEoin who was assisted by his
CUES and civil service colleagues. The Civil Service Credit Union was the
first vocational credit union set up in Ireland.
Now it was Munster’s turn; here the inspiration came from Bishop
Cornelius Lucey, another powerful voice for co-operative living. Ballyphehane
Credit Union started in a church basement in July 1960 with thirty eight
members subscribing £62.
The experience of most people in Derry in the 50’s and early 60’s was
that of high unemployment. Banks and other financial institutions did not
advance credit without substantial collateral or guarantees (you had to be a
homeowner in order to get a loan and very few people owned their own homes in
the late 1950’s!). Money lenders charged exorbitant rates of interest
perpetuating the cycle of hardship. Consequently the ordinary working class
people in the city had only very costly sources of credit available to them.
Six forward-thinking individuals, of which John Hume was one, decided
there must be a source of affordable, reasonable credit for the ordinary
person in Derry. They researched and discovered the fledgling Irish credit
union movement and the well established international movement. These six
individuals pooled their combined savings of eight pounds and ten shillings
and, in October of 1960, formally established Derry Credit Union - the first
credit union in the city and the first to be founded in Northern Ireland.
Credit Union League of Ireland.
In early 1960, with numerous credit unions in business the movement
had established a strategic base and its leaders began to build for the future
with ever-increasing confidence. All soon realised the need for an umbrella
agency to co-ordinate rules and to point the way ahead; and so the Credit
Union League of Ireland (now the Irish League of Credit Unions) was set up at
a meeting in Dublin, February 1960 and operated from the main living room of
Nora Herlihy’s house in Dublin for many years.
The five founding unions of the League and the CUES each provided two
directors; the first President was Rev Patrick Gallagher of Clones Credit
Union; Sean Forde CUES, Vice President, Nora Herlihy CUES, Secretary, Capt.
Michael Quinlan, Treasurer and a founder of Dun Laoghaire Borough Credit Union
and Séamus P. MacEoin CUES and Civil Service Credit Union was Press Relations
Officer.
In the following fourteen months, six more credit unions were affiliated
to the League. Liptons Employees (later Shamrock) was the first of these, and
it was also the first of many commercial credit unions that would follow along
the path of Ireland’s industrial revolution over the next twenty years.
Growth
The movement advanced through the 1960’s not in small steps, but by
a series of spectacular leaps. By the end of the decade 180,442 people had
joined 336 unions spread through out the 32 counties and their savings
amounted to almost £9 million.
Today, in 2008 there are 2.9m members with €13.4bm in savings. But
figures only tell part of the story. Let’s give credit where it’s most due….to
the thousands of Irish men and women whose achievements in their own
communities could never be recorded in a balance sheet.
Donore Avenue Credit Union Ltd, Dublin is Ireland’s longest established
credit union today.