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Drumcondra Credit Union goes into liquidation

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THE Central Bank has got the High Court to agree to the appointment of a liquidator to Drumcondra Credit Union in Dublin.

Regulators insisted the action was taken in the best interests of members and the broader public.

Savings of members covered by the State Deposit Guarantee Scheme.

It is understood the credit union has struggled for a while to build up its capital level to satisfy regulatory rules.

A sharp depreciation in the value of its buildings meant its balance sheet took at hit.

The Central Bank stressed that the move to have liquidators appointed was not related the exceptional circumstances of Covid-19.

Stephen Tennant and Nicholas O’Dwyer of Grant Thornton have been appointed as joint provisional liquidators.

The regulator said in a statement: “The Central Bank has been engaging with Drumcondra Credit Union to address its long standing challenges connected with its financial viability.

“Despite efforts by Drumcondra Credit Union to overcome those challenges through a voluntary transfer of engagements, all potential solutions available to the credit union were ultimately unsuccessful. “

The credit union’s board has been co-operating with the Central Bank at all times, including in the appointment of the liquidators, the Bank said.

The appointment of joint provisional liquidators to Drumcondra Credit Union will not impact on members’ savings in any other credit union, regulators said.

The Central Bank said it is aware that there is a demand for the services of a credit union in the community and is committed to seeking to ensure that credit union services are available within the local area.

The Deposit Guarantee Scheme will cover deposits up to €100,000 per person.

Payments will automatically issue to the address held on file by the credit union.

Members do not have to take any action themselves as compensation payments will automatically issue by cheque to all duly verified depositors.

It is understood the credit union has around 5,000 members, and savings of €13m. Its assets are around €14m.

Efforts will now be made to provide credit union services to people in the area following the move to shut down Drumcondra CU, the Central Bank and the Irish League of Credit Unions said.

A small number of credit unions got into trouble during the last financial crash. Newbridge, Rush, Charleville and Berehaven, went bust.

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