A court appointed "special manager" is to take over the complete running of Newbridge Credit Union with immediate effect following an application by the Central Bank to the Commercial Court in Dublin this evening.
The court heard the application was being made under the Central Bank Credit Institutions Resolution Act, which allows a special manager be installed to run the entire operations of a Credit Union when it was feared regulatory requirements were not being met.
The manager, from the Ernst & Young company, is to review the loanbook, funding and arrears at Newbridge Credit Union.
But the court emphasised "it will be business as usual".
Senior counsel Paul Gallagher made the ex-parte application on behalf of the Central Bank, saying the act allowed the order be granted where an institution failed, or was likely to fail, to meet regulatory requirements.
Mr. Justice Nicholas Kearns heard from correspondence between Newbridge Credit Union and the regulatory authorities.
The board argued it was "unreasonable" for the Central Bank to proceed in the way it planned.
The Central Bank argued there was an urgency involved in seeking the order, to secure the Credit Union's financial position.
The court heard the 2011 AGM had been postponed and there were concerns about a possible regulatory breach of minimum reserves being held at Newbridge.
The Central Bank said "the action has been taken to protect members' savings and to allow the credit union to operate as normal."
This is the first such action to be initiated under this legislation against a Credit Union.
Finance Minister Michael Noonan said he fully supports the intervention taken by the Central Bank on Newbridge Credit Union and was consulted on the intervention.
“The appointment of a Special Manager is a necessary measure and was taken in the best interests of Newbridge credit union members,” he said.
