The Central Bank has confirmed that that the level of non-traditional credit union type lending at Newbridge Credit Union (NCU) exceeded 10 percent of the loan book when the Special Manager took over in January 2012.
In a letter sent by the Registrar of Credit Unions, Sharon Donnery to Deputy Martin Heydon, TD, the registrar wrote, that this was a key concern for the Central Bank.
One concerned member, Ian Hennessy, slammed the Regulator for not acting sooner in a letter sent to the Minister for Finance, Michael Noonan on August 18 last, cosigned by members Des Swan, John Munnelly and Alan O’Neill. Mr Hennessy, who was told at the 2009 AGM that loans in excess of €1m were granted to members, also claims in the letter that members have been let down by a number of practices that have taken place within NCU.
It refers to “the sweeping powers afforded the Registrar under the Credit Union Act 1997”, which it claims were neverused to proper effect in the case of NCU. The letter asks “if the Special Manager would be willing to work with a new board of directors with the support of NCU members” to retain the credit union in Newbridge.
Meanwhile, former Newbridge CU Director Breda Reid, who retired in January 2013 after 20 years service, said on Monday that Newbridge CU was not the only CU giving out loans of that size.
“There was no problem with those loans while there was no recession,” she said.
“We had €164m in member savings in 2010. The loans were covered euro for euro by the provisions. There was no wrong doing.”
In the only statement released in early 2012 by the Board of Directors due to a gagging order, they said “that almost 90%” of the loan book comprised of small loans.