THE CENTRAL BANK has confirmed that provisional liquidators have been appointed to Charleville Credit Union in Co Cork.
The bank applied today to the High Court to appoint David O’Connor and Jim Hamilton of BDO as joint provisional liquidators. It explained that it made the application as it formed the view that the credit union “is in breach of a number of regulatory directions and is in a distressed financial position”.
“In the absence of taking this action, it is the Central Bank’s view that there could be a disorderly failure of Charleville Credit Union.”
It said it is conscious that there is a demand for the services of a credit union in the local area and is committed to ensuring credit union services are available in the community.
Deposits in the Charleville Credit Union up to €100,000 are protected under the Deposit Guarantee Scheme and payments will automatically issue to the address held on file. Members do not have to contact the credit union and the Central Bank said cheques will be sent out as early as possible, within 20 working days.
It also stressed that today’s activity does not have any impact on member’s savings in any other credit union.
Any customers who have a loan with this branch must continue to make payments within the terms and conditions of the agreement. The joint provisional liquidator will contact all members with outstanding loans to make arrangements for repayment. The Central Bank said the liquidation will not result in any change in members’ repayment obligations so a faster repayment schedule, for example, cannot be imposed.
Speaking to C103 earlier, local councillor Ian Doyle described the news as a “disgrace and a disaster”. He said neither staff at the credit union, nor the wider community had any idea it would be suddenly closed today.
“A huge service in our town which has kept businesses and people and scholars and schools going is now gone and it’s a disgrace,” he said. Local people had been campaigning to keep the credit union, which had 12,000 members, open, but he said the direction of the Central Bank appeared to be “set in stone”.
Doyle said it is “a slap in the teeth” for the people of Charleville to have this service removed from their community.
In its statement today, the Central Bank said it remains “fully supportive of the credit union sector in Ireland and is committed to the continued development of a strong and sustainable sector that meets members’ changing needs and protects their savings”.
It said that in presenting its assessment to the court, the Central Bank outlined that it believes all feasible options available to the credit union to raise and maintain its reserves at the levels required by law have been exhausted.
“The Registry of Credit Unions has been engaging with Charleville Credit Union over a number of years seeking remediation of the weaknesses in its financial position. The Central Bank is of the view that the inability of the credit union to address its reserve position, despite previous receipt of external funding, has resulted in it being necessary to apply for the winding up of the credit union.
“The Central Bank is of the view that the credit union has been provided with the opportunity to address the issues concerned and, in the opinion of the Central Bank, they have not been adequately addressed.”
More information for Charleville Credit Union customers can be found here.
To embed this post, copy the code below on your site
have your say