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Credit union caution

THE FINANCIAL Regulator has reiterated that 20 credit unions remain on "financial watch" and said the organisation must exercise particular caution.

Financial Regulator Matthew Elderfield has issued a letter to the various chapters, ahead of the financial year end.

The letter outlines a very specific request to auditors to place a strong emphasis on the adequacy of bad debt provision and the requirements of paying a dividend.

The Irish League of Credit Unions (ILCU) has refuted the suggestion that 20 of its chapters were on the watch list and said such statements may cause undue concern among its members.

Provisions in the Central Bank Reform Bill regulating credit unions passed yesterday were sharply criticised by the Opposition, who claimed they would facilitate commercial banks to "ravage" the deposits of credit unions.

The ILCU also said that it was "deeply unhappy" with many of the provisions contained within the Bill.

"We do not feel that our concerns and the concerns of our member credit unions have been taken into consideration either in the original Bill or the subsequent suggested amendments to it," the group said in a statement.

"The new proposals will mean too much red tape and extra costs will hinder credit unions in helping members reschedule loans in these difficult times," it added.