Maynooth Credit Union and the Irish League of Credit Unions (ILCU) have agreed to drop legal action they had taken against the Central Bank.

The proceedings were brought against the Central Bank over the way in which regulatory directions were issued to five Credit Unions, including Maynooth, last year.

This comes after the Central Bank conducted a review of the assets of Credit Unions due to concerns about their stability.

Approximately 100 Credit Unions were part of this asset review, which was initiated two years ago by the Central Bank.

“We are pleased to have reached an agreement with the Central Bank,” Kieran Brennan, Chief Executive of the ILCU said.

The Central Bank released a statement noting that the judicial review proceedings initiated last July, and that the regulatory directions, which were the subject of the proceedings, will remain in place.

“Regulatory directions are imposed on credit unions to mitigate risks identified and are kept in place in order to protect members savings until such time as the Central Bank is satisfied that the issues, that gave rise to the concerns have been fully addressed,” the statement added.

The Central Bank intends to carry out updated reviews of Maynooth Credit Union Limited and the other Credit Unions which were subject to the proceedings.

“The Central Bank has agreed it will carry out new reviews of the positions of these Credit Unions. The first review will take place in the next six weeks”, Mr Brennan added.

Maynooth Credit Union had previously complained that it was not consulted properly before the directions were issued for the review.

“Credit Unions will be asked to comment on the assumptions before the reviews are carried out”, Mr Brennan said.

“There is also a new engagement process as part of the settlement between the ILCU and the Central Bank”, Mr Brennan concluded.

The Central Bank has said it will continue to engage directly with individual credit unions in relation to regulatory matters and the statutory obligation to comply with regulatory requirements rests with those individual credit unions.

It will continue its work programme in relation to the supervision of all credit unions, including taking pre-emptive action for those credit unions that are identified as having a weakened financial position.