Credit Unions' shortfall fund 'down €50m'

Credit Unions' shortfall fund 'down €50m'
Newbridge Credit Union

A reserve fund for Irish credit unions is €50m lower than initially thought, it has emerged.

The Irish League of Credit Unions says an emergency stockpile of €70m - down from €120m - is available for struggling credit unions.

The news comes as the scale of the financial difficulties faced by credit unions continues to emerge with an €11m black hole identified across 20 institutions.

Tánaiste Eamon Gilmore told the Dáil yesterday that 20 credit unions of the country’s 392 reported reserves below the minimum requirement of 10% of assets. They have a shortfall of €11m, which will need to come from the special fund.

Kieran Brennan, CEO of the Irish League of Credit Unions, is advising members with deposits that their money is safe.

"We can assure everybody that their credit union is safe, that their deposits are safe, that they are covered by the deposit guarantee scheme, that there's a fund there for credit unions, that they have substantial provisions - all of those things are there," Mr Brennan said.

"(Customers') savings are safe and secure in their Credit Union."

Mr Brennan's comments follow the emergency takeover of Newbridge Credit Union by Permanent TSB earlier this week, a move described by Finance Minister Michael Noonan today as "our final option".

Minister Noonan told an Oireachtas finance committee this morning that he would have preferred if the problems could have been solved by the credit union movement itself instead of needing outside assistance.

But he says he is hopeful that a new credit union can rise from the ashes of Newbridge.

"It would be our policy objective, and the policy objective of the Central Bank, to maintain a credit union presence in Newbridge," the minister said.

"Whether that's by way of a string credit union establishing a sub-office there, or interested parties in Newbridge coming together to reestablish a credible Newbridge Credit Union."

Meanwhile Sinn Féin is calling for any credit unions that are in financial difficulties to be identified.

Jonathan O'Brien, Sinn Fein TD for Cork North-Central, said people have a right to know what is happening.

"You can never have enough transparency when it comes to your financial institution or your democratic system," Deputy O'Brien said.

"So obviously we have to carry out all the stress tests and see where they stand, but I don't see any reason not to at this stage inform people who have invested in credit unions that their money is safe."

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