CAMPAIGNERS trying to prevent their credit union from being forced into a merger claim that a probe of its books show it should never have had a court-appointed special manager put in place.
The High Court put a special manager in charge of Newbridge Credit Union in January 2012 at the request of the Central Bank amid claims over the financial health of the lender.
It is now proposed to merge it with Naas Credit Union, also in Co Kildare.
Newbridge Credit Union Action Group has had its own accountant examine the books of the lender in the lead-up to the appointment of the special manager and claims that there was no need for the move.
However, the Central Bank has rejected the claims of the action group.
Willie Crowley of the action group claimed that regulators forced the board of Newbridge to put aside an extra €16.2m to cover bad debts, a move that meant the credit union then had insufficient regulatory reserves.
Newbridge ended up with almost €41.5m to cover bad debts. Mr Crowley maintains that this was excessive as it was three times more than the bad debts provision other credit unions were required to make.
But the Central Bank defended its actions. A spokesman said: "Due to the seriousness of the issues and the potential impact on the credit union's ability to operate effectively, the appointment of the special manager was necessary to oversee the day-to-day operations of the credit union and seek to put it on a stable footing and to protect members savings."
There were concerns about loan losses. "We had specific concerns in relation to the level of losses incurred by the credit union, which impacted on the level of reserves held by the credit union," the spokesman said.
"We also had concerns about some of the lending made by the credit union, which went beyond the traditional type of lending normally provided by credit unions and increased losses at the credit union."
The Central Bank said that if it had not acted, the position of Newbridge Credit Union would have continued to weaken and deteriorate, which could have had serious consequences.