Enhanced credit union rules urged

Difficulties at the credit unions in Firhouse in Dublin and Mitchelstown in Co Cork reinforced the clear need for enhanced regulation and improved management, the registrar of credit unions, Mr Brendan Logue, said yesterday.

Mr Logue, registrar of credit unions at the Irish Financial Services Regulatory Authority (IFSRA), said it was aware of certain problems at a number of credit unions and had "initiated a series of actions to ensure that members' savings and funds are protected".

He also said IFSRA was working closely with the Irish League of Credit Unions (ILCU), the body to which most credit unions belong.

"These recent problems reinforce the clear need for enhanced regulation and improved management within the credit union movement, to ensure the protection of more than €10 billion in credit union members' funds."

Mr Logue's comments follow a report in The Irish Times on Monday of difficulties at the Firhouse and Mitchelstown credit unions.

Accountants PricewaterhouseCoopers have been appointed to prepare a report on Firhouse Credit Union. The Garda and the Revenue Commissioners have been informed of concerns of possible fraud and money laundering.

Accountants from Deloitte have been appointed to report on Mitchelstown Credit Union, where a report from its supervisory committee indicated that administration of the credit union was being hampered by divisions on the board.

Mr Logue said yesterday that, contrary to reports, Firhouse would be obliged to hold its annual meeting no later than June 30th, 2004, as required in law.

He said he wanted credit union members to know that IFSRA was dealing with the issues that have emerged and that it was working with ILCU in relation to the issue of the safety and security of savings.

He said the credit union movement was facing more of these problem cases than had previously been the case, and that this pointed towards the need for enhanced regulation.

IFSRA is receiving ongoing reports from Firhouse and Mitchelstown.

Mr Logue said the accountants appointed to Mitchelstown had been given a broad remit.

ILCU, in a statement, said proper procedures in relation to Firhouse had been followed concerning the reporting of possible money laundering and fraud.

"The credit union board has dealt comprehensively with these matters assisted by their external auditors, staff and the league's monitoring team. The credit union is in good financial shape and trading effectively."

It added that the annual general meeting would be held in June and the dividend paid as normal.

In relation to Mitchelstown, the league said there had been some human relations difficulties in the credit union that were currently being addressed in a constructive manner.