Sale of Rush Credit Union premises and loan book approved by High Court
The High Court has approved the sale of the loan book and offices of bust Rush Credit Union to a neighbouring lender.
Fast-expanding Progressive Credit Union will now take over the €9m-worth of loans which are owed by around 1,600 people in the North County Dublin villages of Rush and Lusk.
Progressive has already received approval to do business in Rush and Lusk following the appointment last November of a provisional liquidator to Rush.
Now the High Court has given it the go-ahead to take over the loan book, after liquidators McStay Luby put its sale out to tender. Progressive has also bought the premises in Rush and the one in Lusk.
No sales price for the offices has been disclosed, but the two offices were on the market for around €1m.
The sale of the loan book comes after people paying off loans to Rush Credit Union complained to the Central Bank over what they claim are threats from the liquidators.
The former members claim they were threatened with poor credit ratings unless they signed up to make repayments through a standing order.
McStay Luby said it was investigating the claims, but denied threats to report people to the Irish Credit Bureau (ICB) for not setting up standing orders.
The securing of the loan book by Progressive will further widen its presence in North Dublin.
Already one of the largest credit unions in the country, it grew out of a number of mergers. It is made up of former stand-alone credit unions in Balbriggan, Baldoyle-Portmarnock, Donabate, Glasnevin, Howth-Sutton, Skerries, and Swords-Rivervalley, and Victory in Ballymun and Glasnevin.
Progressive Credit Union reported a surplus for last year of €1.7m, and has total assets of €150m.
It has reserves of close to €19.6m - well in excess of the minimum regulatory requirement.
The credit union has total membership of 45,416.
Rush Credit Union was placed into liquidation by the Central Bank and the High Court following the emergence of a €4.7m hole in its reserves, and allegations of financial mismanagement emerged.
Gardai are expected to press charges in relation to the allegation of fraud at the credit union.
Meanwhile, a number of credit unions has been criticised by regulator, the Central Bank, as they have a “minimalist” approach to compliance.
In a review of the fitness and probity of credit union staff, the Central Bank questioned the governance in some of them.
Credit unions found to have low-levels of compliance are understood to be mainly smaller ones.
An inspection by the Central Bank raised issues around not keeping due diligence records on file, which resulted in a lack of evidence to support compliance with the fitness and probity regime.
Credit unions were also identified as having a lack of meaningful succession planning, and there was a failure to document processes and to maintain due diligence records on file, resulting in a lack of evidence to support compliance.
Kevin Johnson of the Credit Union Development Association said the probe highlighted the need for tiered regulation will allow some credit unions to continue offering basic savings and loans only, while allowing other credit unions to provide more of their existing services, in particular long term loans.