Credit union wins bid to have case heard in public
THE Central Bank and the credit union regulator have failed to get a court case in relation to Maynooth Credit Union held behind closed doors.
It relates to a case where the regulator has claimed Maynooth did not comply with a direction that it have a minimum 10pc of assets in its reserves as required by law.
The credit union and the Irish League of Credit Unions (ILCU) have challenged a number of directions issued last April and July by the regulator, including in relation to Maynooth's reserves.
The Central Bank and the Registrar of Credit Unions had asked the High Court for the case to be heard behind closed doors.
However, following a two-day hearing over the in-camera issue, High Court president Mr Justice Nicholas Kearns yesterday found the challenge should be heard in open court in the absence of any express statutory bar on doing so.
The registrar of credit unions, Sharon Donnery, said in an affidavit that in the second half of 2012, her office, the Registry of Credit Unions (RCU), decided to undertake an asset review programme and Maynooth was chosen as one of the participants.
Accountants Deloitte carried out the review at Maynooth after which the RCU notified the credit union's directors that it was in breach of the 1997 Credit Union Act and of regulations passed in 2009 in relation to the 10pc of reserves which the RCU said should be set at €1.25m.
It was asked to seek private sector funding or engage with the Credit Union Restructuring Board in relation to potential restructuring solutions, Ms Donnery said.
Maynooth said it had requested support from the ILCU's savings protection scheme but it still failed to comply with the direction, Ms Donnery said.
Maynooth had commissioned its own report and along with the ILCU put forward a lower figure for the 10pc reserve than had been identified by the RCU. The RCU considered that report but there was nothing in it to alter its earlier view and a second direction that the credit union come into compliance was issued in July, Ms Donnery said.
Maynooth and the ILCU then got High Court permission to challenge the directions which they say severely restrict their ability to operate and could have implications for the country's other credit unions.
The Central Bank and RCU then asked the court to have the hearing in camera because of the commercially sensitive nature of the information in the case and because of concerns about the impact the information involved could have, not just on the stability of Maynooth but on the credit union sector as a whole.
Maynooth and the ILCU opposed this saying they had no fear of the information that would be presented in open court. Tom Kiely, head of monitoring in the ILCU, in an affidavit, rejected the claim that any of the available data would suggest financial instability in Maynooth or in the sector.
Any suggestion that the disclosure of relevant information could lead to a loss of confidence or withdrawal of funds from Maynooth, or from credit unions in general, were misplaced and did not reflect the fundamental differences between the ordinary banking world and the credit union sector, he said.
The credit union sector is fundamentally sound and has the backing of a loyal membership as well as the ILCU's savings protection fund, he said.
Yesterday, after finding the matter should not be held in camera, Mr Justice Kearns set January 21 for the hearing of the challenge. He was also told the Central Bank and RCU were not appealing his decision on the in-camera application.