EU approves €280m credit union scheme

A €280m scheme, mostly state-funded, to help some of the country’s 374 credit unions restructure has been approved by the European Commission.

The scheme, €25m to support amalgamations and €30m of which is earmarked to stabilise specific credit unions, is initially coming from the State but will be refunded by the bodies helped, and from a levy on the sector. Credit unions, provided they have a certain minimum level of reserves, can apply for capital injections to raise their reserves, while those below the ratio will have to be wound up, or merge with stronger credit unions, and can apply for aid. The Central Bank will assess the viability of each credit union which is part of the conditions for the operation of the scheme and as required by the troika.

Only credit unions with up to €100m in assets will be allowed benefit from the aid. The average Irish credit union has assets of about €35m each.