Some 200 members and supporters of Newbridge Credit Union protested outside the Central Bank today against plans to merge the business with Naas Credit Union.
A special manager to Newbridge Credit Union was appointed by the Central Bank in 2012 under legislation which prohibits board members talking to the press about the financial affairs of the organisation.
Minister for Finance Michael Noonan has set up a €500 million fund to recapitalise struggling credit unions, some of which are to be merged.
New regulations which comes into effect in January next will introduce more stringent criteria for assessment of loans to members.
Last week the Central Bank said the only viable future for Newbridge Credit Union was to merge with Naas Credit Union.
However, members and supporters of Newbridge Credit Union insisted their credit union was solvent. Supporters who did not want to be named said audited figures for 2009 showed total savings of €164 million, with loans of €120 million and a provision for bad debt of €25.6 million.
They said a requirement introduced in 2010 that provision for bad debts be doubled, had the effect of bringing the amount they had set aside below a critical threshold, bringing the union into the realms of what they describe as “draconian” legislation to force the organisation to merge.
The supporters have also claimed there were plans to sell off the premises of Newbridge Credit Union for an estimated €1.5 million. The building was valued for the then board in 2010 at €15.8 million.
Speaking at the rally outside the Central Bank Willie Crowley told protesters the process of change would see credit union funds across the State assigned to the banks “and we know what they did with their own banks”.
Mr Crowley told The Irish Times the new lending criteria would force credit unions to have regard to savers’ credit ratings, and would remove the “common bond” ethos of the unions. This would effectively render them the same as the main banks, he said. “People who can’t get bank loans will be in the hands of money lenders”, he claimed.
However, a spokesman for the Central Bank said appointing a special manager to Newbridge Credit Union was in the best interests of members and he reiterated the Central bank’s position that there would “be no viable future” for Newbridge Credit Union unless it was merged.
He said there had been a “degree of non-typical lending” in the credit union and it would now need to rely on the Government’s contingency funds for a figure in the region of “tens of millions”.
The Central Bank spokesman added that credit union services would remain available in Newbridge and savers deposits of up to €100,000 were guaranteed by the Government.
“The idea that there is a conspiracy to take the sector’s money and use it to bail out the banks has no basis” he said.
