The Central Bank has promised to review all proposals received in relation to the future of Newbridge Credit Union (NCU). However, it has stated that NCU will not be recaptialised on a stand-alone basis from public funds.
A proposal from NCU Action Group will be handed to the Minister for Finance Michael Noonan for delivery to the Central Bank in the Dail today (Tuesday).
Local Fine Gael TD Deputy Martin Heydon has taken ideas from a number of individuals in relation to the future of NCU, which he delivered to the Minister for Finance over the past few weeks.
“If anyone has a coherent plan in relation to NCU, I’m happy to submit it,” he said.
Meanwhile Central Bank spokesperson Nicola Faulkner said all proposals will be reviewed in relation to Newbridge Credit Union.
However she noted that since NCU does not have access to private sources of capital, the Central Bank deemed it is not feasible to recapitalise the credit union on ‘a standalone basis from public funds’.
“On that basis the only remaining options available to the Central Bank under the 2011 Act in relation to NCU are a transfer to another credit union or liquidation,” she said.
“The Central Bank has sought to find a member-controlled credit union based transfer solution for NCU through a combination with another credit union.
A process involving the examination of possible credit union combinations was undertaken, which resulted in an approach being made to a number of credit unions including Naas. In April 2013, Naas submitted a proposal to the Central Bank.
The proposal set out the basis upon which Naas would be prepared to combine with NCU to secure the long term future of credit union services in Newbridge.”
Meanwhile a proposed merger with Naas CU is yet to be approved by the directors of Naas on behalf of the members.
Naas has 21,000 active members while Newbridge has 28,000 active members. However, its loan book is much smaller than Newbridge’s, with €29 million in outstanding loans to members in 2011.
While no official figure on the cost of the bail out have been released, the Minister for Finance said it will take “tens of millions of euros” to complete - a bill which will ultimately be footed by the tax payer in the future. All savings up to €100k are guaranteed.