Blow to local communities as axe falls on thrift funds
LETTER FROM DIOCESE SAYS ‘PENNY BANKS’ COULD LEAVE GROUPS OPEN TO CRIMINAL PROSECUTION
COMMUNITIES ACROSS Wexford are lamenting the loss of what was, for many people, a vital money-saving scheme, the parish Penny Banks or thrift funds.
Last year, participating groups were ordered to cease operating the collections, which were very popular in many communities around Wexford and the country. Despite the request, a number of the funds continued to operate this year, prompting the Finance Committee of the Diocese of Ferns to issue a letter to parishes telling them to desist.
In that letter, chairman of the committee Eugene Doyle outlined the issues facing community groups, pointing out that the groups need a Central Bank licence to operate, saying that the funds were, essentially, seen as ‘unauthorised banking’ by the regulator, and could leave participants open to criminal prosecution.
Mr Doyle added: ‘We are further advised that in running ‘penny banks’ there is a danger that the anti-money laundering and prevention of terrorism regulations would be ignored or not quite followed diligently which would bring the ‘penny bank’ and those running it under scrutiny of the regulator.’
He added that the charities regulator could also investigate if they deemed fit.
He said: ‘We are advised that in spite of the fact that the running of ‘penny bank’ is a worthy and positive community activity, it is now illegal to run a ‘penny bank’ unless you are a licensed banker,’ adding that all such facilities that a parish was connected to should be closed down as soon as possible.
However, not everyone is happy with the de- velopment, with many saying that it is another blow to small, local communities.
Bernie Mullen is one of 12 people who run the St Patrick’s Thrift Fund in Rosslare and Kilrane. The fund was started over 50 years ago to fund the building of St Patrick’s Church as 5% of the final figure saved each year was donated towards the building project.
Like other funds, the money was collected by the group at a set time each week, banked and paid out at Christmas time.
People, she said, enjoyed the social aspect of the fund and the fact that they could vary the amount saved each week: ‘Some weeks people could come in with a fiver and other weeks they might have an extra few quid and they’d be delighted.
It was great for older people at Christmas time.’
She explained that when the initial order was made, they looked into ways around it and changed the account to a church restoration fund to continue their service. She added that there was a lot of refurbishment needed on the church building. She pointed out that, on a good year, the church could get up to €10,000.
Bernie feels that the development is another blow for ‘ the little man’, swatting away the notion of the funds being used for money laundering: ‘We know every person in the village, putting their 20 quid in each week. It’s a ridiculous excuse.’
She believes that people’s main reason for using the fund was to support the church, adding that the number of Mass-goers was diminishing. She also believes that the convenience and social aspect of the fund enticed people to take part.
Fr John Carroll, Communications Manager for the Diocese, said they could see the logic of the regulations but also empathised with the local communities who had benefitted from the penny banks over the years.
‘It’s a regulation imposed by the State - we’re not qualified to operate banks so you can see the logic.’
He acknowledged that people were disappointed with the move and said they would harbour some concerns that people might be vulnerable to money lenders again, but said that they would encourage people to look into saving schemes with the credit union in particular.
‘ These funds served a huge purpose down through the years as they raised money for local churches and projects, as well as getting people into a regular routine of saving. But they are operating outside of the law now and have to stop.’
Local councillors too have voiced their dismay at the change.
Cllr Davy Hynes has tabled a motion on the matter for the September meeting of Wexford County Council, saying he fears that the amount of regulation being forced upon voluntary organisations will drive people out of them. He added that he and his wife were regular savers with the Clonard Thrift Fund.
‘ This all stems from corruption at the top - so much is being done to avoid what happened before in financial institutions even though the regulator was asleep at the wheel for that. This is part of a right-wing agenda that places no value on community.’
He feared that clubs and community associations would struggle under the weight of regulation being placed on them: ‘It’s one thing if people are being paid to deal with it but most groups are made up of volunteers, providing a community service and just wanting to get on with things.’
He added: ‘ There are people who have put so much time into building and running these things, but how long will it be before people just walk away?’ Cllr Frank Staples said he had spoken to an accountant about the issue who had outlined the main issues around the practice.
‘ They were told to give up last December. A few parishes tried to get around it and the Diocese has called them up on it. I believe Wexford was one of the last counties doing the fund. It only affects a small ammount of communities but it’s another thing that’s gone. It was a great way of saving a few bob. I think some people were going to Mass simply to contribute to their fund. It was a great social thing as well.’
Locals in the Mayglass/Ballymore area had voiced their disgust over the issue, he said, pointing out that it had been running for over 40 years. One person, he remarked, had referred to the whole scenario as ‘red tape gone wrong’.
‘I was told they would need a Central Bank licence and risk assessment clearance but that’s a lot of work to put on small groups.’
THESE FUNDS SERVED A HUGE PURPOSE DOWN THROUGH THE YEARS. BUT THEY ARE OPERATING OUTSIDE OF THE LAW NOW AND HAVE TO STOP – FR JOHN CARROLL, COMMUNICATIONS MANAGER, DIOCESE OF FERNS