Friday 21 September 2018

Credit Union handed largest ever fine for 'exposing the savings of members to risk'

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Stock Photo
Charlie Weston

Charlie Weston

A CREDIT union in Kilkenny has received the largest ever fine for a lender in the sector.

St Canice’s, which is one of the largest credit unions in the country, was fined €210,000 by the Central Bank.

The lender admitted the breaches and there was no loss to members, the regulator said.

But the credit union was accused of failing to report a breach of the rules to the Central Bank and trying to cover it up for almost a year and a half.

St Canice’s is the largest community credit union in the State, with assets of €350m.

The breach involved the lender failing to properly check and verify its accounts when it was migrating to a new IT system in 2014.

The failure to reconcile its main bank account over a 15-month period exposed member savings to a risk of loss, the Central Bank said.

When it became aware of this, it failed to report it to the Central Bank, and “during that time knowingly submitted five inaccurate quarterly prudential returns to the Central Bank”, according to a statement by the regulator.

The Central Bank said it is now satisfied that St Canice’s has addressed all issues of concern identified in the investigation.

Director of enforcement and anti-money laundering in the Central Bank Seána Cunningham said the fact that the credit union knowingly submitted incorrect prudential returns to the Central Bank for 15 months was unacceptable.

“This is unacceptable as the Central Bank relies on these returns to assess the financial position and stability of credit unions,” she said.

By submitting inaccurate returns, the credit union compromised the Central Bank’s ability to effectively and appropriately supervise it, the regulator said.

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