Regulator closely monitoring 10 credit unions under pressure (Irish Times)
The regulator’s Registrar of Credit Unions Brendan Logue has directed the Mitchelstown organisation to cease business lending and curtail other lending as an independent inspector reviews its €35 million loan book. In private correspondence with the credit union’s board last month, Mr Logue said he was concerned that four of its top five loans were in arrears in September and pointed out that the board did not seem to be aware that three loans for some €250,000 were issued since then.
Expressing concern about lending functions and the adequacy of the credit union’s provisions for bad and doubtful debts, he also noted projections that the credit union’s losses on its €65 million investment portfolio might reach €4.6 million this year. An Irish Examiner report on Mr Logue’s correspondence prompted steady queues throughout yesterday at the credit union’s office as worried members questioned the safety of their savings.
“Massive withdrawals” were made, said Fianna Fáil TD Ned O’Keeffe, himself a former member of the credit union. But Kieron Brennan, chief executive of the Irish League of Credit Unions (ILCU), said he made two phone calls to the Mitchelstown Credit Union and was told that there had been no unusual withdrawals yesterday. One current member of the credit union, who did not wish to be named, said he went to withdraw his money but had been persuaded that his savings were safe because of the Government guarantee on deposits up to €100,000 and was satisfied with that.
The credit union moved yesterday to reassure customers that their money was secure. “Mitchelstown Credit Union is covered by the Government guarantee. The board of Mitchelstown Credit Union wishes to confirm that all monies are safe,” it said. “The regulator has stated that ‘members should have no reason to be concerned about the safety and security of their savings or about the solvency or liquidity of their credit unions’.” Although RTÉ News showed pictures on its television bulletins yesterday of customers queuing in the Mitchelstown office, Mr Brennan said he was told that there “hadn’t been” a queue. “There is no panicky queuing in Mitchelstown,” he said.
Emphasising that the ILCU was a representative organisation and not the regulator of its member credit unions, Mr Brennan said the body was seeking reassurances from Mitchelstown Credit Union that its affairs were in order. Asked about the issuance of loans for some €250,000, he said: “Without knowing the context, they would give me pause for thought, yes.”