Credit unions: Reserve rule will lead to run on savings

THE inability of as many as 180 credit unions to pay dividends this year will lead to a “catastrophic” run on the members’ €10 billion in savings, the Irish League of Credit Unions (ILCU) has warned.

It said losses and the need to build up cash reserves under new regulations could lead to the crisis.

ILCU chief executive Kieron Brennan has asked the Financial Regulator not to introduce strict new reserve ratios in September – which will compel the country’s 405 credit unions to have a statutory reserve of 10% of total assets.