More credit unions will be restructured or merged over the coming years with at least another 20 so far having failed basic minimum standards.
The Government yesterday pledged to support the troubled sector following the emergency takeover of Newbridge Credit Union by a bank earlier this week.
It came as Finance Minister Michael Noonan briefed his Cabinet colleagues on the future of credit unions as the Central Bank examines the health of 100 unions.
The Government expects there to be more restructuring or merging of unions, Tánaiste Eamon Gilmore’s spokesman said.
The Tánaiste told the Dáil that 20 credit unions of the country’s 392 reported reserves below the minimum requirement of 10% of assets. They have a shortfall of €11m, which will need to come from a special fund.
Meanwhile, campaigners opposed to the bank takeover of Newbridge Credit Union are going to try to set up their own credit union — and have backed off on threats to challenge the decision in court.
However, the directors of the defunct institution say they are still considering legal action to force the High Court to set aside the transfer order that put the credit union in the ownership of Permanent TSB.
In their first statement on the unprecedented intervention by the Central Bank that overnight saw the credit union’s 36,000 members involuntarily made customers of Permanent TSB, the directors claimed the move was unwarranted.
“After two years of direct Central Bank intervention with all management responsibility in the hands of the [government-appointed] special manager, what started as debatable concerns about bad debt provisioning ended up as an acute liquidity crisis forcing an urgent transfer to a commercial bank,” they said.
The directors said they are consulting with legal advisers and others in the credit union movement to assess how best to proceed, whether by way of application to set aside the transfer order, or have it varied or amended.
The Newbridge Credit Union Action Group is holding a public meeting where it will try to rally support for the establishment of a Droichead Nua Credit Union. Action group chairman Willie Crowley conceded that taking the legal route to oppose the takeover was not an option.
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