The PMS - can its members now show mutual concern?

Written by David Ford MLA and published in Ulster Newsletter on Mon 5th Jan 2009

The recent problems of the Presbyterian Mutual Society illustrate the fragility of the global economic system and its effects in every part of the world. They illustrate that no institution is immune if enough people panic enough - or are greedy enough. It is now a key question whether the society can demonstrate the virtues of the mutual model for financial institutions in the future.

Like many Irish Presbyterians, I have experienced the problems close up. I am a member of my congregation's manse committee: a few days after the society was obliged to stop withdrawals, we were due to withdraw the first payment for the builder of our new manse.

However, while the congregation has an immediate cash-flow problem, we are able to deal with it by seeking a bank loan and accepting interest-free loans. The congregation is capable of waiting for the money deposited in the PMS.

Many individuals are in a far more difficult position. Those who need their deposits to pay for building a new house or moving home, to expand a business or start a new one are suffering as a direct result of the actions of those who withdrew money which they did not immediately need, but chose to transfer to funds protected by the UK Government's deposit protection scheme.

It is little wonder that the December Presbyterian Herald carries several critical comments on their behaviour.

While the clerk of the General Assembly (Rev. Donald Watts) was correct to say that there were no formal links between the Church and the PMS, there were, and are, strong ties between them.

That has led to the welcome decision by the moderator to set up a small action group to explore ways to ease the problems being experienced by members of the society.

The mutual society's administrator is bound by his legal mandate: he has limited powers to treat individuals on the basis of their needs, rather that treating all demands equally.

A major responsibility rests with those investors who can afford to wait for their money. If the principles of a mutual society mean anything, they mean a willingness to support others in greater need than yourself. For many, that was part of the rationale of investing in the PMS. Just as a credit union brings together borrowers and lenders on the basis of a common bond of residence or place of work, the PMS brought together borrowers and lenders as members (or congregations) of the Presbyterian Church.

It would be a sad day if there was not enough willingness on the part of those remaining depositors who can afford to wait to be willing to do so.

The members of the PMS will have the opportunity to show that they put the needs of others first.

It will be a test of them - and of the society - to see whether they do so.