A Dublin-based credit union has collapsed with the High Court appointing provisional liquidators to its business.
Stephen Tennant and Nicholas O’Dwyer of Grant Thornton have been appointed joint provisional liquidators to Drumcondra and District Credit Union after an application was made to the High Court by the Central Bank.
The regulator said the application was made to protect members’ savings and to avoid a disorderly failure of the credit union.
While not one of the larger credit unions in the country, Drumcondra has approximately 5,000 members.
Their savings will be covered by the State’s Deposit Guarantee Scheme, which covers deposits of €100,000 per person.
It is the fourth time the Scheme has been used to cover credit union failures in the past six years.
However, the Central Bank said it views the Drumcondra case as an isolated incident and is not part of a growing wider trend of credit union troubles.
The Central Bank said the action was not related to the Covid-19 disruption.
Drumcondra Credit Union has had long-standing financial viability issues, repeatedly missing regulatory targets of keeping its capital reserves above 10% of its total asset value – largely due to impairments on its building assets.
It has previously needed financial support from the Irish League of Credit Unions (ILCU) and has failed in an attempt to merge with a larger entity.
The ILCU described the news as “very disappointing” and said the overall credit union movement is “strong and extremely well-capitalised”.