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Savings are safe say credit unions after takeover of troubled branch

CREDIT union customers have been assured their savings are safe after a bank took over the running of the institution.

Following the takeover of Newbridge Credit Union, savings at the 393 local credit union branches are "safe, strong, secure", said Kieron Brennan, chief executive of the Irish League of Credit Unions.

He gave the re-assurance following a hearing last night in which the High Court forced the effective wind-up of the Newbridge operation, allowing state-owned Permanent TSB to take over its savings and loans.


Mr Brennan said the Central Bank and the Minister for Finance have expressed confidence in Ireland's credit union network.

He said the Central Bank had declared Newbridge was an "exceptional" case.

The Newbridge branch was one of 12 credit unions not affiliated to the league, he added.

This is the first move to get a bank to take ownership of a credit union – unions are owned and controlled by their members.

Mr Brennan sought to reassure the 2.8 million people who are members of credit unions that the State guarantees the security of all deposits held up to €100,000 per customer.

Mr Brennan said: "Credit unions are safe, strong, secure. We are very clear on that and we are backed in that by the Central Bank and the Minister for Finance.

"Members are very aware that their savings are protected by the Government by the Deposit Guarantee Scheme up to €100,000 per member per credit union."

Mr Brennan went on to stress that the Central Bank stated that the Newbridge situation was "exceptional in nature" and the rest of the credit union movement was secure.

Permanent TSB group chief executive Jeremy Masding said Newbridge Credit Union members need not take any action today, and there would be "no change" in its operations.

He said: "Our role is to stabilise the credit union and ensure that this special relationship with the local community is protected.

"Members can rest assured that they can continue to operate their loan and deposit accounts as normal."

Independent MEP Marian Harkin told Morning Ireland on RTE Radio One that credit union members around the country would be "afraid and concerned" at the way the Central Bank had acted.

She accused it of using "jackboot tactics".

It was reported that the State will be forced to inject tens of millions of euro into Newbridge Credit Union to boost its reserves.


The 36 staff there will become Permanent TSB employees.

In a statement, the Central Bank said: "The transfer ensures members' savings are protected and that no member has lost money."

In the High Court hearing, the Central Bank used emergency banking legislation to seek approval for the take-over.

The move had been fiercely resisted by barristers for the Save Newbridge Credit Union Action Group.