Sunday 22 April 2018

Local lenders have had share of controversies

Berehaven Credit Union which closed last year on foot of court orders
Berehaven Credit Union which closed last year on foot of court orders
Protests outside Newbridge Credit Union in 2013 Newsdesk Newsdesk

The credit union sector has not suffered anything like the number of scandals to hit the banks, but this does not mean the movement has not had its share of problems.

Two credit unions have been forcibly shut down by the courts.

Newbridge Credit Union had its accounts transferred into Permanent TSB at the end of 2013, after regulators in the Central Bank ran out of options for turning it around.

The Kildare credit union had been involved in inappropriate commercial lending and spent a fortune developing elaborate offices.

Last year, Berehaven Credit Union was also closed on foot of court orders, after lending irregularities led to its demise.

And last year, this newspaper revealed that 121 credit unions enlisted the services of rogue private investigation firms that had stolen reams of personal data belonging to members of the public.

Convictions of private investigators in the courts followed, with promises by credit unions to stop using the investigators.

Back in 2003, Gurranabraher Credit Union found itself in hot water after it issued millions of euro of loans in breach of its internal lending policy, according to evidence produced before the High Court.

But the biggest scandal of all was the €35m loss suffered by the League of Credit Unions in 2000, over a proposed central computer system for the then 530 credit unions.

The fallout from the ISIS central computer system disaster split the credit union movement down the middle, with several of the larger credit unions leaving the league to form the Credit Union Development Association (CUDA).

The league survived, more or less intact, but it was a close-run thing.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business