The Gold Medal for Best Letter Submission 2014: An Analysis of the Newbridge Credit Union Takeover: What Comes Next for Ireland's Credit Unions?

• Author: Keith Winters
• Position: BCL (UCC), LLB
• Pages: 155-159

[2014] COLR

155

The Gold Medal for Best Letter Submission 2014

AN ANALYSIS OF THE NEWBRIDGE CREDIT UNION TAKEOVER:

WHAT COMES NEXT FOR IRELAND’S CREDIT UNIONS?

Keith Winters*

Dear Editor,

Given the recent spate of coverage in national and local media regarding the Irish

credit union sector, and having worked in a legal and risk capacity with a credit union

over the past year, I thought it might be useful to relay some of my own reflections on

the issues facing a movement that has become so deep-rooted in the Irish psyche.

On the evening of the 10th of November 2013 the High Court, in dramatic fashion

befitting the prospect of a ‘run’ on deposits at a financial institution, convened a late

night sitting which ultimately resulted in the Court giving its approval of an

application by the Central Bank to use its powers under the Central Bank and Credit

Institutions (Resolution) Act 2011 in directing the transfer of the assets of Newbridge

Credit Union Ltd. (NCU) to Permanent TSB.

This is the first time that a credit union has been taken over by a bank in Ireland and

while the precedent is theoretically a worrying one for those within the Irish Credit

Union movement it is unlikely to be replicated across the sector. NCU presented the

Central Bank with a particular set of problems whose scale is not mirrored to the same

degree among the one-hundred or so credit unions (of 392) that have been identified

as requiring closer supervisory scrutiny. For other credit unions in trouble it is

unlikely that a course of action as severe as has been taken with NCU will be

necessary with the voluntary transfer of engagements into more stable anchor credit

unions being the preferred route. The political repercussions of the NCU transfer will

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* BCL (UCC), LLB.