The Registrar of Credit Unions has criticised unplanned mergers between credit unions, which he said run the risk of merely creating bigger weak organisations that could be "catastrophic" for the credit union movement.
Addressing the Credit Union Managers Association conference in Athlone, James O'Brien called for a "top down" blueprint for nationwide mergers and resolutions of credit unions.
Mr O'Brien said: "The prospect of unplanned 'merger mania' where credit unions jockey for position within the sector is also a concern for us. Ill-thought out, voluntary mergers happening in a chaotic fashion with little professional oversight of the restructuring process could have a catastrophic impact on the sector where the outcome simply creates bigger 'weak' entities incapable of developing."
The Registrar - who is an officer of the Central Bank - said a new regulatory framework for credit unions was being designed to guide credit unions towards prudent development, and attract volunteers with the necessary skills to oversee this development.
He said there had to be a blueprint for the credit union sector which would direct change in a planned and coherent way.
Mr O'Brien said the Central Bank would continue with its resolution programme this year to deal with failing or weak credit unions.
"Ideally we would like to see this work carried out under the umbrella of a 'top down' countrywide framework designed to achieve the optimal structural changes required for the sector to work towards its potential," he said.
