Credit unions want court battle to be held in open
THIS week's move by credit unions to challenge regulations imposed by the Central Bank could have huge implications for the 400 locally owned lenders, observers said.
A bitter battle is set to break out in the High Court between credit unions and the Central Bank over how much regulation should be imposed on the community owned lenders.
MEP Marian Harkin said the case could be hugely significant for the movement and the push to encourage a large number of the lenders to merge.
The Irish League of Credit Union and Maynooth Credit Union are seeking to quash rules issued by the Central Bank and Credit Union Registrar in the Central Bank which they claim severely restrict their ability to operate.
The case is due before the court tomorrow.
It is claimed that regulatory directions issued to Maynooth Credit Union, along with a number of the other credit unions, severely restrict their ability to operate.
Among the grounds pleaded is that the effect of the directions, if applied across the board, would be to deplete the league's Savings Protection Scheme Fund – a bailout scheme for credit unions that are short of funds – in its entirety.
Now it has emerged that the credit unions will challenge the attempt to have the court case heard "in camera" – or behind closed doors.
A statement issued by the league, which is the largest representative body for credit unions in Ireland, says it has challenged the secrecy move.
League boss Kieron Brennan said credit unions were deeply concerned about the "proportionality" and consistency of Central Bank rules for the locally owned lenders.
And he said the league saw no need to have the court battle held behind closed doors.
"It is important that state regulators operate openly, clearly and accountably. They should not seek to scare the public or exaggerate risk for the sake of achieving unarticulated policy objectives."
And he said that the league saw no need to have the court battle held behind closed doors.
Mr Brennan said this country was an open society with an educated public capable of digesting contradicting views.
"If anything, the correct way to deal with these issues is with sunlight and transparency rather than to hide this dispute from the public eye."
He added that the credit union sector was different to the banks and had not needed a state guarantee.
The Central Bank declined to comment.