Credit union savers vow to risk jail in fight against merger plan
Published 02/08/2013 | 04:00
MEMBERS of the country's largest community credit union have vowed to take High Court action to stop regulators forcing it to merge.
The angry response follows confirmation that the Central Bank has proposed that Newbridge Credit Union in Co Kildare is to have its business transferred to nearby Naas.
Newbridge would retain a sub-office in the town but would be owned by the combined membership of the two lenders.
Locals see this as control transferring to the neighbouring lender.
Newbridge has been run by a court-appointed manager for the past 18 months, in a process that is expected to cost €2m.
Finance Minister Michael Noonan said he supported the Central Bank proposal to merge Newbridge's activities with the smaller Naas operation.
It is understood the members will not get to vote on the merger proposal. Instead, the directors of Newbridge will have to approve the plans.
But members of the Newbridge Credit Union Action Group have promised to challenge the merger move in the High Court. Willie Crowley of the Newbridge group, said he and his members would be prepared to go to jail to stop the Central Bank's plans.
Up to 1,000 people attended a meeting on Wednesday to support plans to keep Newbridge as an independent credit union.
Mr Crowley said his action group has received legal advice stating that as a credit union was owned by its members, regulators would not be able to force it to merge.
"Members are prepared to put their hands in their pockets to support a legal challenge to this. We are also prepared to go to jail to stop this," he said.
Newbridge has around 37,300 members, making it the largest community-based credit union in the State. Naas is understood to have 16,000 members.
Luke Charleton, of Ernst & Young, has been running the credit union for 18 months, but there has been no annual meeting, no accounts published and no dividend paid.
The appointment of the special manager appears to have come about due to property-related loans made by the credit union and arguments over its governance.
Regulators have claimed the credit union had to be taken over as it was not putting sufficient reserves aside to account for the collapse in value of its new office block.