Ireland’s credit unions are in such dire straits that $1.3billion in unused bank funds was recently approved to aid some ofthe country’s struggling cooperatives.

|

According to Reuters and other media outlets, Ireland Ministerof Finance Michael Noonan said the Department of Financerecapitalized the banks for less than expected and as a result, theresources were there to use.

|

“I seriously intend sorting out the credit unions, and some ofthem we'll have to do immediately but we won't do it in one bigbang,” Noonan said Oct. 6.

|

As far back as 2006, the Department of Finance may have knownIreland’s credit unions were on the brink of a financialdownturn, according to an Oct. 9 article in the Sunday BusinessPost Online.

|

The regulator was supposedly warned about systemic risks andgovernance problems at the time but did not act soon enough toprevent them, said Bill Hobbs former chief executive of the CreditUnion Development Association.

|

The registrar of credit unions at the time, Brendan Logue,submitted a draft to the department calling for a stabilization anddeposit guarantee plan to protect members’ funds, the publicationreported. However, the proposal did not move forward, which leftonly a $160 million fund run by the Irish league.

|

In 2007, Hobbs also warned officials that Ireland’s creditunions would not be adequately protected against financialshocks.

|

Former CUNA President/CEO Ralph Swoboda was at that meeting andexpressed similar concerns, according to the Business Postarticle.

|

Swoboda later served as chair of the Association of BritishCredit Unions Ltd.’s management committee, the trade body forcredit unions in England, Scotland and Wales.

|

“Credit unions in Ireland are under-regulated, and we shouldexpect that situation to change with the imposition of newregulations,” Swoboda said in 2006, the publication reported. “Badloans are another issue that will be addressed, with the actualsituation probably considerably worse than is being reported.” 

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.