St Canice's Kilkenny Credit Union has been fined €210,000 and reprimanded by the Central Bank for eight breaches of the Credit Union Act after an investigation.
The Central Bank said the credit union, which has over 57,000 members, failed to properly manage the integration of a new IT system which resulted in it being unable to reconcile its main bank account correctly.
As a result, the Central Bank said that St Canice's was unable to ensure the protection of members' savings, but it stressed that no losses were actually sustained.
St Canice's also knowingly submitted incorrect returns to the Central Bank for 15 months.
The Central Bank said this was unacceptable as it relies on these returns to assess the financial position and stability of credit unions.
"By submitting inaccurate returns, the Credit Union compromised the Central Bank's ability to effectively and appropriately supervise it," the Central Bank said.
The Central Bank said the level of the fine reflects the potential serious impact on members, the failure to ensure effective oversight and governance; and the lack of engagement with the Central Bank.
"Regulatory failures of this nature will result in rigourous investigation and appropriate enforcement action," the Central Bank's Director of Enforcement and Anti-Money Laundering, Seána Cunningham, said.
Ms Cunningham said that credit union members have an expectation that their funds will be safeguarded to the highest standards.
"Effective safeguarding of funds is built upon robust governance and systems and controls within a credit union. The board of a credit union retains primary responsibility for these matters and therefore must adequately oversee and manage all activities of a credit union, including those outsourced to a third party," she added.
Since the breaches were uncovered, St Canice's has undertaken a review of its systems and procedures and has implemented a number of improvements including the introduction of an IT strategic plan, a change management policy and the appointment of an IT officer.
