The Central Bank of Ireland has apologised following the identification of “calculation errors” in contributions made by financial institutions, mostly credit unions, to its deposit guarantee scheme.
Consumers are unaffected by the errors relating to the scheme, which is designed to protect depositors in the event an authorised bank, building society or credit union is unable to pay out withdrawals.
The Irish League of Credit Unions (ILCU) said it had pointed out the “anomalies” to the Central Bank.
The bank has now written to participating member institutions to confirm the errors, which resulted in some institutions being overcharged and some being undercharged by an overall equal amount.
How does VAT in Ireland compare with countries across Europe? A guide to a contentious tax
‘I was a cleaner in my dad’s office, which makes me a nepo baby. I got €50 a shift’
Will we have a tax liability if Dad gives us his home while he is alive?
Finding a solution for a tenant who can’t meet rent after splitting with partner
The Central Bank said on Friday that its assessment was still under way, but that its initial findings are that the contribution processes for two years – 2019 and 2021 – are affected, and that the extent of the matter totals about €253,000 across all institutions, or less than about 0.1 per cent of the total value of funds collected.
Due to the nature of the calculation process, it will result in undercharges and overcharges to a number of member institutions, with no effect on the overall value of the scheme, it said.
“We apologise for this and we understand and regret any inconvenience that may arise, for credit unions in particular, as a result. It is clear from our initial assessment, however, that the maximum undercharges/overcharges involved are not in any way significant in terms of the financial position of any individual credit union.”
The Central Bank said it would “move as quickly as possible” to finalise its assessment, identify the next steps and “regularise” the position of the affected institutions.
“As soon as our assessment is complete, expected in February 2023, we will communicate our planned process for regularising the position in terms of monies due to the fund, or monies due from the fund, for all affected institutions. We will prioritise refunding overcharges to affected institutions,” it said.
“In the meantime, no immediate action is required by any institution until they receive further communication on this matter.”
ILCU welcomed the bank’s statement.
“This acknowledgement from the Central Bank follows on from representations made by the ILCU on behalf of our member credit unions to the Central Bank in early December, where we pointed out the anomalies in the calculation of the DGS contribution levies issued to credit unions,” said ILCU chief executive David Malone.
“We welcome the swift action taken by the bank and we look forward to our continued engagement to ensure this issue is concluded to the satisfaction of our credit unions.”
