Credit unions ditch plan for bailout levy
CREDIT unions have ditched plans to impose a levy on the sector in a bid to raise an additional €6m to bail out troubled credit unions.
The Irish League of Credit Unions (ILCU) had planned to slap the levy on its members to boost its bailout fund, which is known as the Savings Protection Scheme (SPS).
The SPS was set up by the league to provide emergency funding to ailing member unions. It recently emerged that the €114m fund had crashed to €74m after it was forced to provide financial commitments for 13 credit unions.
Since the league produced its annual accounts, a further seven credit unions have sought help from the fund.
Delegates at the annual general meeting of the Irish League of Credit Unions in Belfast last weekend were to have voted on a special levy on member credit unions to raise another €6m to shore up the SPS. But a spokesperson for the league said yesterday that the motion was not put to the meeting.
This was because talks between the league and the registrar for credit unions, who is based in the Central Bank, have just begun on putting the SPS on a statutory footing.
The league denied that this amounted to the credit unions losing control of the SPS, as it would in future be under the stewardship of the Central Bank.
It said: "The league continues to control and manage the SPS fund. The recent AGM gave its clear support for the league board to engage in talks with the Central Bank around these issues."
Once these talks are concluded, a special general meeting will be held, it added.
Financial analyst Bill Hobbs said the taking over of the stabilisation fund was an inevitable consequence of the impact of the economic crisis and that there would be consolidation within the sector.