Cantillon: Could Newbridge end up with two rival credit unions?

There was a whiff of irony to the news this week that taxpayers are coughing up for yet another bailout of a private financial institution, coming as it did just days after the troika’s final “site inspection”.

Ireland was supposed to be finished with all these financial industry bailouts. “Not a penny more,” we were told by the Government upon its election. Not a penny – but €54 million.

The latest rescue deal, for Newbridge Credit Union (NCU), means the State will plug the hole in the union's balance sheet before ramming it into Permanent TSB, itself 99 per cent State-owned following its own bailout.

Is this the crippled saving the lame?

For nigh on a decade the directors of NCU fought a running battle with the Central Bank over NCU's governance. The regulator got its own back on Sunday, filing a damning High Court affidavit severely criticising the directors for the way NCU was run.

The directors, past and present, deny they did anything wrong, and emotions are running high. Breda Reid, who resigned from the board in January, said the loss of NCU felt like a "death" to her. "All my family and friends are members of NCU. Why would I want to damage it?" she told The Irish Times.

The current board has vowed to mount a legal challenge to reverse or amend the PTSB deal, something the regulator says “cannot be undone”.

But who will cover the cost of the directors’ latest challenge to the authority of the Central Bank?

The word is that the NCU directors will receive assistance from the Credit Union Development Association, the rival representative body to the Irish league of Credit Unions (ILCU).

Which presents the possibility of another delicious twist of irony. There was a meeting last night in Newbridge to set up a new credit union, and the ILCU has offered to advise its organisers. But what if the NCU directors succeed in court, and Newbridge ends up with two credit unions linked to two rival bodies?