Senator proposes Credit Union savings protection

THE savings of the country’s two million credit unions members would be guaranteed by law under a proposed compensation scheme.

The proposed Credit Union Savings Protection Bill, which will be introduced into the Seanad by Senator Joe O’Toole, will make the savings of those in credit unions as safe as those in banks and building societies.

At present the €14 billion in assets held by nearly 500 credit unions across the country is unsecured even though each credit union contributes to a savings protection scheme.

Under the bill proposed by senator O’Toole a special company would be set up with individual credit unions making annual payments. If any credit union went bust this company would guarantee members received their funds.

Bill Hobbs, chief executive of CUDA, which represents some of the largest credit unions, welcomed the move.

“The bill will also level the playing field between credit unions and other financial institutions. Ultimately, credit unions are consumer focused and this bill is entirely supportive of credit unions’ fundamental mission,” Mr Hobbs said.