Monday 23 April 2018

New credit union chief's €350,000 loans breach law, says report

ILCU director Matt Heffernan
ILCU director Matt Heffernan

Charlie Weston Personal Finance Editor

A MAN who has just become a director of the Irish League of Credit Unions has credit union loans that are so large they are in breach of the law, an internal report alleges.

The Irish League of Credit Unions has notified gardai about the loans.

Loans of €350,000 for houses in Spain and Bulgaria are central to the league's concerns.

The loans drawn down breached the Credit Union Act because of their size, confidential documents seen by the Irish Independent show.

The act sets limits on the value of loans for an individual relative to the assets of a credit union.

Gardai have been informed that application forms for loans obtained by newly-elected Irish League of Credit Unions (ILCU) director Matt Heffernan contained incorrect personal information, giving a different address and occupation to the ones he has.

Mr Heffernan, of Limerick, is a former field officer with the league, a job that involved him monitoring the activities of a set number of credit unions in the south of the country.

He obtained loans totalling €350,000 to buy properties in Spain, Cyprus and Bulgaria from one of the credit unions in the Cork area he was charged with monitoring from 2001. A probe into the Co Cork credit union by accountants KPMG, seen by this newspaper, points out that the loans were not being repaid.

According to the KPMG report the loans were reviewed and it was "concluded that 100pc of the drawn-down loans associated with Mr Heffernan required provisioning".

This means the credit union was forced to put funds aside as it fears they will not be repaid.

Mr Heffernan inspected the credit union in 2007 and 2009 in his role as a field officer for the league. His reports made no reference to his loans with the credit union he had inspected, according to the KPMG investigation.

He had an obligation to declare his interest in the loans at the Co Cork credit union to the league, but he did not, KPMG concluded.

And the inspection reports prepared by Mr Heffernan for the league, in his role as a field officer, made no reference to the solvency of the credit union.


The credit union had to be subsequently bailed out with a €2.3m package from the league's rescue fund in 2010.

Mr Heffernan was elected to the board of the League of Credit Unions in February. The league said directors are elected by affiliated credit unions.

The league is a representative body for 500 credit unions on the island. The new director is due to begin his term of office on the league board on April 28.

He is also a director of Caherdavin credit union in Limerick, despite credit union rules banning membership of more than one of the locally-owned lenders.

Issues raised in the KPMG report are understood to have been reported to gardai in Cork and Dublin.

Asked a series of questions, the league said: "There are statutory obligations to notify An Garda Siochana of certain matters under Section 19 of the Criminal Justice Act, 2011."

Mr Heffernan had no comment when contacted by this newspaper.

He said he had not seen the KPMG report and insisted his loans were a private matter.

Irish Independent

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