One of the State's largest credit unions to be wound up following High Court order
One of the largest credit unions in the State is to be wound up following an order from the High Court.
Provisional liquidators were appointed to Charleville Credit Union today after an application made by the Central Bank.
Troubled Charleville in Cork is the third credit union to have a liquidator appointed. It follows wind-up orders for controversial Rush earlier this year, and Berehaven Credit Union two years ago.
Savers with money in the Charleville were assured by the Central Bank that their money will be returned to them.
It has 12,000 members and assets of €43m.
The shut-down of the credit union is despite Agriculture Minister Michael Creed directly lobbying the Central Bank a number of months ago in a bid to stave off the closure.
The lender has been struggling for years to bring its reserves up to a point that satisfies the credit union registrar, based in the Central Bank.
Charleville has received around €8m in rescue funds from the Irish League of Credit Unions in the past, but was understood to need another €5m.
The Irish League of Credit Unions had been prepared to provide rescue funding to it, but a deal was never finalised.
The High Court has now appointed accountants David O’Connor and Jim Hamilton of BDO as provisional liquidators.
The board of the credit union will be able to appeal the liquidator decision by Monday, with a hearing likely on Wednesday.
In a statement, the Central Bank said: “The appointment of joint provisional liquidators to Charleville Credit Union does not have any impact on members’ savings in any other credit union.
“The Central Bank is conscious that there is a demand for the services of a credit union in the local area and is committed to ensuring credit union services are available in the community.”
The court was told the Central Bank believes all feasible options available to the credit union to raise and maintain its reserves at the levels required by law have been exhausted.
The Registry of Credit Unions has been engaging with Charleville Credit Union over a number of years seeking remediation of the weaknesses in its financial position, the Bank said.
“The Central Bank is of the view that the inability of the credit union to address its reserve position, despite previous receipt of external funding, has resulted in it being necessary to apply for the winding up of the credit union,” the Central Bank stated.
The decision to apply to the High Court to wind up Charleville Credit Union was made by Central Bank governor Philip Lane.
Various attempts were made this year to merge Charleville with a stronger credit union.
The Central Bank and the Irish League of Credit Unions had to abandon a deal that would have seen the Cork lender taken over by financially stronger Clonmel in Tipperary in April.
Members of the Tipperary lender objected to the tie-up on the basis that it would weaken their lender.
In the past few years Newbridge in Co Kildare was taken over by Permanent TSB, under a court order.
And Kilorglin in Kerry, and Howth/Sutton in North County Dublin, were taken over by stronger creidit unions, on the directions of the High Court.