A case by the Central Bank and the credit union regulator (RCU) against Maynooth Credit Union will be held in open court following a decision by the High Court.
The regulator has claimed Maynooth CU, whose members have not had an opportunity to attend an agm/receive a report last year, did not comply with a direction that it have a minimum 10% of assets in its reserves as required by law.
Maynooth and the Irish League of Credit Unions (ILCU) have challenged a number of directions issued last April and July by the regulator, including in relation to Maynooth’s reserves.
Following a two-day hearing, High Court president Mr Justice Nicholas Kearns found the challenge should be heard in open court in the absence of any express statutory bar on doing so.
The Court heard accountants Deloitte carried out the review at Maynooth after which the RCU told the Maynooth directors they had breached the 1997 Credit Union Act/2009 regulations in relation to the 10% of reserves.
The credit union was asked to seek private sector funding or talk with the Credit Union Restructuring Board in relation to potential restructuring solutions
The Regulator said Maynooth said it had requested help from the ILCU’s savings protection scheme but failed to comply with the direction.
Maynooth/ ILCU proposed a lower reserve figure but the RCU did not change its mind, according to the RCU witness in the hearing. A second direction that the credit union come into compliance was issued in July.
Maynooth/ ILCU then got High Court permission to challenge the directions which they say severely restrict their ability to operate and could have implications for the country’s other credit unions.
A Sunday Business Post report quoted the RCU affidavit as saying that Maynooth had a reserve of 0.8%, undera a tenth of the legally required amount. Maynooth had applied for €1.5m from the ILCU Savings Protection Scheme.