Savvi CU fined over pay and breaking loan rules

The Central Bank said it has slapped a fine of €185,500 on Savvi Credit Union, one of the country’s largest credit unions, after investigating that it paid a director and breached long-term lending guidelines.

The reduced fine that was originally much larger at €265,000 came after the regulator found the credit union paid travel expenses that exceeded €28,341 the Civil Service rates. The payment was deemed as paying a director, which is prohibited.

Over the same four years to 2017, the credit union failed to follow rules set by the Central Bank over how much the credit union could loan over the longterm — defined as longer than 10 years.

Seána Cunningham, the director of enforcement and anti-money laundering, said its decision “should send a clear message to the sector that credit unions must take a responsible and prudent approach to ensure compliance with their regulatory requirements”.

Savvi has a number of outlets in Dublin and was one of a number of credit unions which last month said it would roll out current accounts and electronic payment cards for its members.

“The Central Bank sets lending limits to mitigate risks specific to long-term lending including credit, liquidity and concentration risk,” said the regulator.

“In July 2017, Savvi notified the Central Bank that it had breached the long-term lending limit at the end of June 2017. Despite this, Savvi issued a further nine long-term loans between July 2017 and December 2017. Each of the nine loans represented a breach of the relevant long-term lending limit set by the Central Bank.

"The investigation found that Savvi’s systems, controls, and governance arrangements were deficient in a number of respects,” it said.