Anger at plans to merge strong credit union with struggling counterpart
PLANS for a mega merger of Munster credit unions have hit a stumbling block, with members of the financially-stronger lender opposing the tie-up.
Angry members of Tipperary's Clonmel Credit Union attended a meeting on Tuesday night opposing plans for their lender to take over troubled Charleville CU.
Regulators and representative bodies are urging Cork's Charleville to allow itself be taken over by Clonmel.
However, Charleville has a historic problem with bad debts and needs funding of €4m from a League of Credit Unions rescue fund to shore up its balance sheet.
There was universal opposition to the merger plans at the Clonmel meeting, which was attended by 130 members after being convened at short notice. Members said they first heard of the planned merger when it was reported in the Irish Independent last week.
And they were disappointed there was so little information provided by their lender since, according to Cllr Catherine Carey, of Sinn Féin, who organised and chaired the meeting.
Clonmel CU pays a healthy dividend every Christmas and offers generous interest rebates, she said. There are fears that linking up with Charleville will impact on these benefits.
"People were angry. They don't want a merger to create a high-falutin bank with huge costs, where you have to queue up to use machines," said Cllr Carey, who is deputy mayor of Clonmel.
She added that people were questioning why a link-up with Charleville was being proposed when the towns are at least 50 miles apart. "We don't want to take on the debts of other people and those at the meeting were annoyed they had to open the newspaper to find out about this," she added.
Ninety of those in attendance voted to exercise the right of credit union members to force the board of Clonmel Credit Union to hold a special general meeting with them to provide information on the proposed merger.
More than 50 members have to sign a petition for this.
Tipperary's Clonmel lender is conducting due diligence ahead of a merger, with the Central Bank closely involved in monitoring developments.
Charleville has been hit by a big fall in the value of its offices in the town - a large former bank branch. No annual general meeting has been held since August 2012, according to the Irish League of Credit Unions.
Charleville has in the past aggressively gone after people who failed to repay loans.
In 2013, it secured €1m in court judgments against 16 individuals, the highest of any credit union that year.
It has been hit by high levels of bad debt despite operating in the wealthy Golden Vale hinterland.
Although they are a considerable distance apart from each other, Clonmel was chosen to take over the Charleville lender due to its financial strength.
The manager of Clonmel CU, Paul Davey, was unavailable for comment, but a joint statement issued by Mr Davey and Charleville manager Annette Kiely earlier this week said exploratory talks were taking place.
"If a merger or transfer of engagement should take place, we will inform the members of both credit unions directly," it said.