Members of a Cork credit union that is currently in liquidation have been paid back nearly €40m of their deposits with the institution, which reopened its doors this week, writes Joe Leogue.
David O’Connor and Jim Hamilton of BDO were appointed as joint provisional liquidators to Charleville Credit Union in the High Court last month, on foot of an application by the Central Bank which said the Cork institution was in a distressed financial position.
While the credit union had closed its doors after the appointment of the liquidators, it reopened on Wednesday with limited operations.
“Charleville Credit Union is currently open and in operation for members to make repayments on their loans,” the Central Bank told the Irish Examiner yesterday.
It said the Central Bank “is conscious that there is a demand for the services of a credit union in the local area and is committed to ensuring that full credit union services are available in the community.
“In this regard, the Central Bank is currently liaising with a number of credit unions in the locality who may be in a position to set up a sub office as an interim measure.
“Further to this, the Central Bank will consider any application for a credit union to extend its common bond into the Charleville area on a case by case basis.”
Local councillor Ian Doyle said he understands that talks about a potential merger with another credit union are at an advanced stage, with any such move paving the way for the restoration of full facilities in Charleville.
Last week, the Central Bank said payments totalling €39.2m were made by cheque to some 10,900 members of Charleville Credit Union, which represents over 98% of eligible deposits covered by a scheme put in place to protect customers’ money.
Last month’s decision to apply to the High Court to wind up Charleville Credit Union was made by the governor of the Central Bank.
“In presenting its assessment to the court, the Central Bank outlined that it believes all feasible options available to the credit union to raise and maintain its reserves at the levels required by law have been exhausted,” the Central Bank said of its decision.
“The Registry of Credit Unions has been engaging with Charleville Credit Union over a number of years seeking remediation of the weaknesses in its financial position.
“The Central Bank is of the view that the inability of the credit union to address its reserve position, despite previous receipt of external funding, has resulted in it being necessary to apply for the winding up of the credit union,” it said.
The payment of deposits to customers is covered by the Deposit Guarantee Scheme (DGS), which is administered by the Central Bank and was activated upon the appointment of liquidators.
Deposits of up to €100,000 per person per financial institution are protected under the DGS.
Payments issued to customers are based on the amount they held in shares and/or on deposit, less any arrears that were due when the liquidators were appointed.
However, anyone with a loan that is not in arrears should get their savings back in full.
Those who have received their cheque in the post, but disagree with the amount of money they have been issued, are asked to fill out and return a DGS depositor claim form which can be found on depositguarantee.ie.
This story originally appeared in the Irish Examiner.