High Court issues transfer order of Newbridge Credit Union to Permanent TSBMonday 11 November 2013 09.43
The Central Bank has confirmed that it has transferred Newbridge Credit Union to Permanent TSB.
Permanent TSB has assumed ownership and management of the customer assets and liabilities of the credit union.
The move came following an application by the Central Bank of Ireland this evening to the High Court for a transfer order.
The transfer was required due to the financial difficulties at Newbridge Credit Union.
It followed a decision of Naas Credit Union not to proceed with its proposed merger with Newbridge Credit Union.
The move will ensure that its members' savings are protected and that no member will lose money.
All services, including deposit and lending facilities, continue to be available to all members from the credit union premises which will open as normal tomorrow.
The Central Bank has said that: "its priority at all times is the protection of members' savings and the maintenance of the financial stability and well-being of credit unions generally, in line with the Bank's mandate."
The Central Bank has said its only viable resolution of the financial difficulties was to transfer it to another entity.
It said that the only alternative option was a full-scale immediate liquidation of the credit union.
This would have interrupted members access to their funds and risks to depositors not covered by the Deposit Guarantee Scheme.
Government explains reasons for the transfer order
The Government has said that the cost to the Resolution Fund of rescuing this credit union will be significant.
It said that the cost of this combination with Permanent TSB will be significantly below the cost of the alternative combination with another credit union.
The Minister for Finance Michael Noonan approved the agreement for the payment of a financial incentive.
The move is to minimise the impact on the members and their locality.
The Minister also sanctioned the transfer order due to the wider implications for the credit union movement overall.
The Government has said that it recognises the important role of credit unions as a volunteer co-operative movement.
It also says that it recognises the distinction between them and other types of financial institutions.
The Department for Finance said that it is the starting point for all decision making when it comes to dealing with Credit Unions who are in difficulties and who can no longer operate on a standalone basis.
Central Bank supportive of credit union sector
The Central Bank says that it remains fully supportive of the credit union sector in Ireland.
It said that is committed to the continued development of a strong and sustainable credit union sector that meets members' changing needs and protects their savings.
The options available to the Central Bank are set down in the 2011 Resolutions Act.
Meanwhile, the Irish League of Credit Unions has issued a statement saying that it wishes to clarify that Newbridge Credit Union is not affiliated to the Irish League of Credit Unions.
Newbridge Credit Union difficulties since 2008
The Central Bank said that it has been seeking to address both financial and governance issues at Newbridge Credit Union since 2008.
This ultimately led to the appointment of the Special Manager in January 2012.
Yesterday, Naas Credit Union turned down the opportunity to merge with Newbridge Credit Union.
The Central Bank said that no credit union considered that it was in its best interests to complete such a merger, even in the context of extensive taxpayer support.