Sunday 25 February 2018

Minister lobbied Central Bank on rescue plan for his local credit union

Bid to save credit union: Minister Michael Creed. Photo: Arthur Carron
Bid to save credit union: Minister Michael Creed. Photo: Arthur Carron
Charlie Weston

Charlie Weston

Agriculture Minister Michael Creed was among politicians who lobbied senior officials in the Central Bank in a bid to ensure there was no move to close Charleville Credit Union.

The politicians from both Fine Gael and Fianna Fáil were fearful for the future of the troubled Co Cork lender after a failed merger.

It is understood to be unprecedented for a Cabinet minister to lobby independent public officials in the Central Bank on a constituency matter. Political sources said they could not recall a previous time.

A spokesman for Mr Creed, who is Agriculture, Food and Marine Minister, insisted he met the officials last week in the bank's Dublin HQ in his capacity as a TD, and not in his capacity as a Cabinet minister.

The politicians met the Central Bank's director of credit institutions, Ed Sibley, and credit union registrar Anne-Marie McKiernan and suggested that Charleville be merged with nearby Mallow in a bid to save it, the Irish Independent has learned.

Mr Creed's spokesman dismissed suggestions it was inappropriate for a Cabinet minister to lobby the Central Bank on the future of a credit union.

"There was nothing inappropriate in what was essentially an exchange of information. He is fully aware of the statutory obligations of the Central Bank and did not seek to impinge on them.The only lobbying the minister did was to ask the Central Bank to explore all options with regard to Charleville Credit Union," the spokesman added.

It is understood no reassurances were forthcoming from the Central Bank on the future of the lender.

Also at the meeting were Fianna Fáil TD Michael Moynihan; Fine Gael spokesman on finance in the Senate, Senator Kieran O'Donnell; and Fianna Fáil councillor Ian Doyle.

Plans to rescue Charleville by merging it with the stronger Clonmel, in Co Tipperary, were abandoned last month.

This means the future of Charleville is now uncertain.It has received about €8m in rescue funds from the Irish League of Credit Unions in the past, but is understood to need another €5m. This is to boost its reserves, which are below the level required by regulators.

The Central Bank had set a deadline of last Friday for the lender to bring its reserves up to 10pc. Reserves are understood to be around 6pc at present.

The credit union has had to dramatically reduce the value of its office in the town since the property collapse, something which has hit its balance sheet hard. It has €43m in assets, and 12,000 members.

In a joint statement issued to this newspaper, the four politicians said Charleville Credit Union was a vitally important institution which provided financial service and stimulus to the public and business community in Charleville and its hinterland. The statement said: "We are acutely aware of the significant challenges facing Charleville Credit Union."

They are aware of the statutory responsibility of the Central Bank and its obligations to the members of the credit union, the statement added.

A merger with Mallow CU, which has €147m in assets and 28,000 members, may not be possible. This is because it has still to bed down mergers with three local lenders announced last August.

Irish Independent

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