Financial Regulator warns credit unions to exercise prudence

THE Financial Regulator has sent a strongly worded letter to all of the country’s credit unions warning them to exercise prudence in the current difficult environment facing most Irish financial institutions.

The regulator has already said that 20 credit unions are on “financial watch” due to the high levels of bad debt affecting them.

The letter has been sent in advance of the financial year end for the movement which is 30 September, 2010, reminding all credit union’s of the concerns the regulator wishes to see addressed in the preparation of their annual accounts.

In particular the letter contains a very specific request to auditors to place a strong emphasis on the adequacy of bad debt provision and the requirements of paying a dividend.

Commenting yesterday a spokeswoman for the regulator said he was “standing over” the figure of 20 for number of Irish credit unions being on a financial “watch list” which means they are being closely monitored to ensure they are not hit with difficulties.

The Irish League of Credit Unions (ILCU) has refuted that figure and in a recent letter attacked the regulator for making “such statements in a public forum which may cause undue concern among the 2.5 million members of over 400 credit unions in the Republic”.

Outlining the basis of the letter, the spokeswoman said in the current financial climate “it is vital that the financial stability of credit unions is protected in the interests of credit union members and savers”.

In the letter the regulator says he will be requesting the movement as part of the year-end audit, to place particular emphasis on the adequacy of the bad debt provisions in the 2010 accounts.

It also makes clear that units of the movement will be required to make a submission in relation to the payment of a dividend.

Those credit unions which have to make a submission on the payment of a dividend have been instructed in the letter not to set a date for their Annual General Meeting and that they should not print the annual accounts for circulation to members until agreement has been reached with the regulator on the dividend payment question.

Credit unions were also informed of the need to “maintain adequate levels of overall reserves and provisions to ensure they remain financially stable”.


Cork teenager Jessie Griffin is launching a new comic-book series about her own life. She tells Donal O’Keeffe about her work as a comic artist, living with Asperger’s, and her life-changing time with the Cork Life CentrePicture perfect way of sharing Jessie’s story

Sorting out Cork people for agesAsk Audrey: The only way to improve air quality in Douglas is to move it upwind from Passage West

The Lighthouse is being hailed as one of the best — and strangest — films of the year. Its director tells Esther McCarthy about casting Robert Pattinson, and why he used 100-year-old lensesGoing against the grain: Robert Eggers talks about making his latest film The Lighthouse

It turns out 40 is no longer the new 30 – a new study says 47 is the age of peak unhappiness. The mid-life crisis is all too real, writes Antoinette Tyrrell.A midlife revolution: A new study says 47 is the age of peak unhappiness

More From The Irish Examiner