A new limit of €100,000 to the amount a person can hold in a credit union account is anti-competitive and unfair, the Irish League of Credit Unions has said.
At a board meeting on Saturday, the first since the new limit came into place on January 1st, the league reiterated its opposition to the restriction which it sees as giving an advantage to banks.
It has resolved to continue with a campaign of lobbying TDs and Ministers in the run-up to the general election.
However, the league stopped short of saying it would mount a challenge before the competition authority or the courts.
It also said that it would co-operate with an examination of credit union regulations to be carried out by the Department of Finance’s credit union advisory committee.
The new limit means that all depositors are fully protected by the State guarantee on deposits of up to €100,000.
However, individual credit unions must apply for permission to retain single account deposits in excess of €100,000 or ultimately return money to investors.
The restriction was one of a raft of new measures arising from a review of the credit union business in 2012. These included more stringent lending criteria.
This had led to the closure of some smaller credit unions and the amalgamation of others with larger unions such as those run by health service workers, the ESB or teachers' unions.
While the Central Bank has said average deposits in credit unions are around €4,000, some larger credit unions have larger deposits.
Paul Ryan of An Post employees credit union said workers who had developed a habit of dealing with the credit union all their lives would be entitled to retirement packages typically one and a half times annual salary.
He said while the overall percentage of any such large deposits was low, forcing depositors to go to banks was “anti-competitive” and “unnecessarily damaging to the reputation of the credit union business”.
The Department of Finance has confirmed that terms of reference for a review of the new credit union regulations have been agreed.
The review is expected to begin this month.
Separately, the Central Bank said it was committed to reviewing the savings limit three years from commencement of the regulations. Thus would be done “once the impact of the restructuring of the sector, currently under way, can be assessed”.
