Shock clo­sure of an­other credit union ‘an as­sault on ru­ral Ire­land’

Irish Independent - - News - Char­lie We­ston and Ralph Riegel

THE wind­ing up of an­other credit union has prompted fears for the safety of other lo­cally owned lenders.

Con­cerns were raised as pro­vi­sional liq­uida­tors were ap­pointed to Charleville Credit Union af­ter an ap­pli­ca­tion made by the Cen­tral Bank to the High Court.

The clo­sure prompted Charleville res­i­dents to ac­cuse the Cen­tral Bank of launch­ing an “bla­tant as­sault on ru­ral Ire­land”.

Trou­bled Charleville in Cork is the third credit union to have a liq­uida­tor ap­pointed. It fol­lows wind-up or­ders for the Rush branch ear­lier this year, and Bere­haven two years ago.

How­ever, the Ir­ish League of Credit Unions in­sisted the lat­est clo­sure does not af­fect the po­si­tion of any other credit union.

“Over­all, the credit union move­ment is strong and ex­tremely well cap­i­talised,” it said.

There are 292 credit unions across the coun­try. Savers with money in the Charleville branch were as­sured by the Cen­tral Bank that their funds will be re­turned to them within a week.

It has 11,000 mem­bers and €40m in sav­ings.

The shut-down of the credit union is de­spite Agri­cul­ture Min­is­ter Michael Creed di­rectly lob­by­ing the Cen­tral Bank a num­ber of months ago in a bid to stave off the clo­sure.

Charleville CU’s for­mer board con­demned the liq­ui­da­tion as un­nec­es­sary and dra­co­nian.

The lender has been strug­gling for years to bring its re­serves up to a point that sat­is­fies the credit union regis­trar, based in the Cen­tral Bank.

High Court Pres­i­dent Mr Jus­tice Peter Kelly was told its re­serves are just 3.5pc of as­sets. The Cen­tral Bank re­quires re­serves of 10pc.

The Ir­ish League of Credit Unions had been pre­pared to pro­vide res­cue fund­ing to it, but a deal was never fi­nalised.

The High Court has now ap­pointed ac­coun­tants David O’Con­nor and Jim Hamilton of BDO as pro­vi­sional liq­uida­tors.

Se­nior coun­sel Paul Gal­lagher, for the Cen­tral Bank, said the reg­u­la­tor was un­happy with its poor lend­ing pol­icy, its cost­sto-in­come ra­tio and its over­all busi­ness model.

Coun­cil­lor Ian Doyle, who is based in Charleville and is deputy mayor of Cork County, said he was “ab­so­lutely fu­ri­ous” that such a clo­sure could be sanc­tioned while Taoiseach Leo Varad­kar was mak­ing a high-pro­file visit to Cork.

“As far as I am con­cerned, this is a bla­tant at­tack on ru­ral Ire­land,” he said.

Charleville Cham­ber of Com­merce pres­i­dent PJ McCarthy warned that it was a “cat­a­strophic de­vel­op­ment” for the town on the Cork-Lim­er­ick border.

“The wor­ry­ing part of this is that credit union mem­bers and the en­tire Charleville com­mu­nity were kept in the dark about what was hap­pen­ing,” he said.

“There has not been an AGM (for some time) and mem­bers had no idea what was hap­pen­ing.”

Mr McCarthy said there was a pal­pa­ble sense of shock when Charleville Credit Union closed its doors at 11am and put a no­tice in the win­dow about the High Court ac­tion.

“It is ab­so­lutely dev­as­tat­ing for the town,” he said.

“This is clearly go­ing to have a sig­nif­i­cant im­pact on the lo­cal econ­omy.

“We have worked very hard in Charleville through­out the re­ces­sion and the sub­se­quent eco­nomic re­cov­ery to pre­serve and pro­tect lo­cal jobs.”

‘The reg­u­la­tor was un­happy with its poor lend­ing pol­icy, its cost­sto-in­come ra­tio and its over­all busi­ness model’

Cus­tomers Charles and Theresa Heaney, and Donal and Mary Deady, out­side the branch. Photo: Liam Burke/Press 22

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