independent

Friday 18 April 2014

300 attend heated AGM of twice bailed-out credit union

A CREDIT union in Monaghan that has been bailed out twice was finally allowed by regulators to hold an annual general meeting this week.

Clones Credit Union is one of around 30 credit unions that have now received emergency funds from a rescue scheme set up by the league that represents the sector, the Irish Independent has learned.

It is one of just three credit unions to have to be bailed out twice.

The Border-based lender got €3m from the League of Credit Unions' bailout fund two years ago, and then a second bailout of €1.2m. Both the amounts were in the forms of letters of guarantee.

High levels of loan arrears pushed the credit union into requesting the financial support of the league's special protection fund (SPS), league chief executive Kieron Brennan said.

More than 300 people turned up in Clones at a stormy annual meeting of the locally owned lender this week. Regulators at the Central Bank had not allowed it to hold an AGM for at least two years.

Arrears

Mr Brennan would not comment on the savings protection fund but he said that Clones Credit Union was now back in profit for last year and was expected to make a profit this year.

But he admitted that loan arrears at Clones were higher than the average for the sector where one euro in every five lent out was not being paid on time.

Loan arrears total around €1bn across the 399 credit unions in the State.

Difficulties getting loans repaid have pushed around 30 credit unions to seek the support of the league's special protection fund. The fund has been hit hard, and is understood to have fallen in value from €125m two years ago to around €60m at present.

Mr Brennan would not comment on any aspect of the special protection fund, but it is understood that most credit unions are now getting on top of the loan arrears problems.

New legislation is going through the Dail at the moment in a bid to strengthen the regulation of the sector.

It comes as worried regulators in the Central Bank have 100 credit unions under close supervision over fears about rising loan arrears. This is a quarter of the number of credit unions in the State.

The League of Credit Unions has called for changes to the legislation before it is enacted as it feels it is more appropriate for banks than volunteer-run lending co-ops.

Irish Independent

Also in this Section

Classifieds

CarsIreland

Independent Shopping.ie

Meet, chat and connect with
singles in your area

Independent Shopping.ie

Meet Singles Now

Findajob

Apps

Now available on

Independent.ie on Twitter

More

Most Read

Daily Deals

Independent Gallery

Your photos

Send us your weather photos promo

Celebrity News