The headlines were impressive as always: savings of �?�12.6bn, loans of �?�7bn and three million members on both sides of the border.

But the big numbers masked serious problems behind the scenes. In a country awash with easy credit, credit unions are losing ground to mortgage providers, hire purchase companies and money lenders.

They claim their hands are tied by outdated limits on the amount they can lend for longer than five years. But the regulator believes that a movement that still relies on the good will of volunteers does not have the skills for this type of lending and would strongly oppose any push into the mortgage market.

The picture is rosier on the savings side of the business and, while dividends have been falling, they still compare well with the deposit rates paid by banks and building societies. But even here there are problems.

The credit unions gave Charlie McCreevy a bloody nose when, as minister for finance, he tried to get them to impose Dirt tax at source. By tackling the same problem in a different way, Brian Cowen is likely to have more success.

Cowen's recent Finance Act requires all deposittakers to report the interest paid on savings to the Revenue. With the taxman peering over their shoulders, credit unions will no longer be a safe haven for a secret little stash.

If they are to prosper, credit unions must find a new purpose in life, one that is no longer based on a bogus belief that they are still the banker for the little guy, especially when the average share account is showing a healthy �?�4,200 balance.

The launch venue for the annual report, St Raphael's Credit Union, said it all. As the garda credit union, it occupies the type of plush premises that any bank would be proud of. Having learned last week that some gardaí earn �?�45,000 a year in overtime alone, we know that St Raphael's members are no little guys when it comes to making money.