Killorglin Credit Union transfer to Tralee approved

The Central Bank has secured High Court orders allowing for the transfer of assets and liabilities from Killorglin Credit Union to Tralee Credit Union.

The transfer was approved yesterday evening by Ms Justice Iseult O’Malley who was informed by Paul Gallagher, counsel for the Central Bank, that the move would not affect any of the Kilorglin Credit Union members or its employees.

Counsel said the transfer, was “in the the public interest”. The court heard Tralee Credit Union had been successful in its bid to acquire Killorglin Credit Union’s assets and liabilities. “While there won’t be a Killorglin Credit Union any more there will be a credit union in Killorglin,” counsel said.

Counsel said the Central Bank was seeking the orders because Killorglin Credit Union had been unable to comply with a direction of the Central Bank in relation to its reserve position.

He said the credit union was directed by the Central Bank to restore its Regulatory Reserve Ratio (RRR) to the required 10%, which it had failed to do. The RRR is the amount held in a credit union’s reserves as a percentage of its total assets. Killorglin Credit Union was below the required level.

The credit union was not able to secure the funding it required to meet its regulatory obligations. Following a lengthy and ongoing consultation process other institutions were invited to bid for Killorglin’s assets and liabilities, with Tralee Credit Union emerging as the preferred bidder.

Counsel said the Central Bank was made aware some years ago of difficulties at Kilorglin Credit Union, which has 10,000 members.

Mr Gallagher said since 2010 the Central Bank sought to correct the problems identified. The problems at Killorglin Credit Union were caused by poor lending and credit control practices. The previous board of Killorglin Credit Union had resigned, and the Central Bank had “no issue” with the current board, counsel said.

The Central Bank said it remains “fully supportive” of the credit union sector and is “committed to the continued development of a strong and sustainable credit union sector that meets members’ changing needs and protects their savings.”