Martin warns of credit union losses

Credit union savers could be burned to the tune of €17m over the liquidation of Anglo Irish Bank, Fianna Fáil leader Micheál Martin has warned.

Taoiseach Enda Kenny was accused of lacking a grip on the situation, as Mr Martin said people in credit unions would be the only depositors in Europe to lose out due to the financial crisis.

Mr Martin questioned why credit union assets were put in danger when the Taoiseach claimed that the emergency legislation deployed to liquidate the renamed Anglo, IBRC, had been in preparation since last November.

“A number of credit unions had fixed-term deposits with IBRC, which were due to be repaid in September of this year. As a result of the decision to liquidate the IBRC, many credit unions will suffer huge losses. Sources within the credit union movement say the losses could be as high as €17m for credit unions across the county. It would be an incredible situation if that were the case.

“Why did the Government not consider making special provision for credit unions when preparing to take the decision?

“The losses involved will at a minimum wipe out any shareholder dividends credit union members could have anticipated in 2013 and 2014, and worse, unfortunately, may have an impact on the stability of some of the credit unions concerned.

“He promised before the election to burn senior bank bondholders, which did not happen. He did not do that and now we are in a situation where credit unions — the banks of ordinary people — have essentially been burned as a direct consequence of the decision taken by the Government?” he asked.

Mr Kenny said the situation would be looked into, but liquidations needed to be sudden.

“I am not aware at this time as to the extent of deposits lodged by any credit unions in the IBRC. Clearly, the examination of the liquidator will bring that to light in due course.

“The question of what the extent of that liability might or might not be remains to be seen and, if that is the case, that is a matter that must be examined in respect of any funding that might be available for credit unions, but it is impossible to distinguish between depositors here.

“Normal deposits are guaranteed but I cannot tell the deputy at this stage to what extent, if any, credit unions have been involved here.

“This was a liquidation. Therefore, we were not going to have the Government going around saying it intended to liquidate the IBRC and that if people had money in it, to take it out,” he said.

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