Monday 1 May 2017

Credit union fined €125k for paying directors - payments prohibited by law

The lender was also sanctioned for weak controls for the paying of expenses to the credit union’s officers (Stock picture)
The lender was also sanctioned for weak controls for the paying of expenses to the credit union’s officers (Stock picture)
Charlie Weston

Charlie Weston

A credit union that was illegally paying its directors has been fined by the Central Bank.

Drimnagh CU in Dublin has agreed to pay €125,000 after it was found to be paying directors and members of its oversight committee.

Credit unions are prohibited by law from paying directors. Positions are filled by volunteers.

The Central Bank said that payments to directors and the board oversight committee totalling €16,000 were made between 2013 and 2015 for services provided and in the form of expenses.

Directors, who were not named, were paid to attend League of Credit Unions meetings, and were also paid expenses on the double.

The lender was also sanctioned for weak controls for the paying of expenses to the credit union's officers.

It was found to have breached legislation when it came to doing credit checks on members and monitoring the credit union's dealings with members.

The credit union had no policies in place for almost a year to ensure it did not breach anti-money laundering legislation, the Central Bank said.

And it failed to scrutinise some members' transactions.

In a statement, the credit union said it co-operated fully with the Central Bank probe. "Drimnagh Credit Union can assure members that their savings and deposits are not affected in any way, and can continue to do business with the credit union in the usual way."

Irish Independent

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