THE CENTRAL BANK has issued its “most serious possible outcome to a fitness and probity investigation” to the former manager of Rush Credit Union, Anne Butterly.
The notice issued to Butterly prohibits her from carrying out any controlled functions, including pre-approval controlled functions, in any regulated financial service provider for an indefinite period.
The prohibition follows a Central Bank investigation into Butterly’s involvement in unauthorised transactions on accounts at Rush Credit Union.
Liquidation
The High Court appointed liquidators to Rush Credit Union on 21 November 2016, with court documents recording that the institution owed about €2 million more than it holds in assets.
A partially redacted report by the Central Bank Resolution Division into the credit union was published as part of the liquidation process.
It described the credit union as “a failing institution with poor governance and systems and control issues that it has failed to resolve over many years”.
The report also found that there was
A substantial purported misappropriation and issues regarding the management of the car draw.
The report was able to uncover payment transactions in relation to the car draw but not the details of winners because “no information is recorded or published on Rush’s website”.
In total, purchase details were found for 15 cars totalling €220,500.
[image alt="original" src="http://cdn.thejournal.ie/media/2017/09/original-223-296x162.png" width="296" height="162" credit-source="Centralbank.ie" class="alignnone" /end]
In a statement today, the Central Bank said its investigation into Butterly has no concluded, with “the issue of a prohibition order of indefinite duration”.
Brenda O’Neill, Central Bank head of enforcement investigations said:
“This outcome shows that the Central Bank’s regulatory reach extends to individuals, and not just to firms.
We take individual accountability very seriously and this case demonstrates our resolve to act where an individual’s conduct falls below expected standards.
O’Neill said that the fitness and probity regime was introduced to strengthen the Central Bank’s enforcement powers against individuals in all parts of the financial services industry, including those working in the credit union sector.
Through its supervisory interactions with credit unions, the Registry of Credit Unions has found that the introduction of the fitness and probity standards has contributed to an improvement in standards of governance, according to O’Neill.
However, while many credit unions have embraced these requirements, the Registry “remains concerned to see that changes in culture have not fully embedded in all credit unions”.
“This is unacceptable given that credit unions are responsible for safeguarding their member’s funds,” O’Neill said.
Where deficiencies in this area are identified, the sector should be in no doubt that the Central Bank will use its full powers, including its enforcement powers under the fitness and probity regime.
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