Pearse Doherty
Question:35. Deputy Pearse Doherty asked the Minister for Finance if he will provide an update on the case of Newbridge Credit Union. [41516/13]
View answerThursday, 3 October 2013
Questions (35, 46)
Clare Daly
Question:46. Deputy Clare Daly asked the Minister for Finance the role of the Central Bank in appointing a special manager to Newbridge Credit Union; his views on whether it is appropriate that to date no detailed reasons have been given to the members for the appointment of the special manager. [41301/13]
View answerWritten answers
I propose to take Questions Nos. 35 and 46 together.
The decision to apply to the High Court for the appointment of a Special Manager is a matter for the Governor of the Central Bank, following consultation with me as Minister for Finance. On 13 January 2012, the Central Bank of Ireland secured a High Court Order for the appointment of a Special Manager to Newbridge Credit Union. Further High Court applications were made to extend the term of appointment of the Special Manager, the latest being in June 2013, and High Court Orders were secured for a 6 month extension period on each occasion.
The Special Manager appointment was made because of Central Bank concerns in relation to the high level of loan losses incurred by the credit union, which impacted on the level of its reserves. There were also concerns about some of the lending made, which went beyond the traditional type of lending normally provided by credit unions. This action was taken to strengthen Newbridge Credit Union, protect members’ savings and ensure that Newbridge Credit Union can continue to operate effectively, providing financial services to the local community.
The Central Bank is responsible for the regulation and supervision of credit unions. That role includes the implementation of resolution action, where required. The Central Bank undertook a process under the Central Bank and Credit Institutions (Resolution) Act 2011, involving the examination of possible combinations with other credit unions. As part of this process, Naas Credit Union submitted a proposal to the Central Bank, setting out the basis upon which Naas Credit Union would be prepared to combine with Newbridge.
At the request of the Governor of the Central Bank, I have confirmed that I am prepared, in principle, to support the proposal. However, the proposal remains subject to amongst other things due diligence, completion of relevant documentation, Naas Credit Union board approval, regulatory consideration and High Court approval. I expect that these steps will be completed expeditiously and that the Naas/Newbridge combination will be finalised by the end of this year. This will necessitate a significant capital investment of taxpayers’ funds into Newbridge Credit Union to cover the losses at Newbridge and to ensure the protection of members’ savings and the stability of Newbridge into the future. The successful combination of these credit unions is considered the best way to ensure the continuity of credit union services for members in Newbridge.
I met with the Newbridge Action Group on 19 September. Following that meeting, the agreed next steps were for the Newbridge Action Group to submit its proposal to me expeditiously. Once received, I have agreed to communicate that proposal to the Central Bank with a view to a meeting between the Central Bank and the Group. As yet no proposal has been received from the Newbridge Action Group. I should also clarify that contrary to media reports no specific amount for the cost of the combination was mentioned by me to the action group.