Newbridge credit union members oppose merger and building sale

About 200 members and supporters of Newbridge Credit Union in Kildare protested outside the Central Bank yesterday against plans to merge the business with Naas Credit Union.

Last week, the the Central Bank, which installed a special manager in the lender in 2012, said the only viable future for Newbridge Credit Union was to merge with the Naas Credit Union. The Central Bank has directed about 15 mergers of credit unions over the past three years.

However members and supporters of Newbridge Credit Union yesterday insisted their credit union was solvent. Sources said audited figures for 2009 showed total savings of €164 million, with loans of €120 million and a provision for bad debt of €25.6 million.

They said a requirement introduced in 2010 that provision for bad debt be doubled had the effect of bringing the amount they had set aside below a critical threshold, bringing the financial institution into the realms of what they describe as “draconian” legislation to force the organisation into a merger.

Regulations, which comes into effect in January next, will also introduce more stringent criteria for assessment of loans to members.

Sources also claimed there were plans to sell off the premises of Newbridge Credit Union for an estimated €1.5 million. The building was valued for the then board in 2010 at €15.8 million, according to documents seen by The Irish Times.

Addressing the protesters yesterday, Willie Crowley said the process of change would see credit union funds across the State assigned to the banks “and we know what they did with their own banks” .

Mr Crowley told The Irish Times the new lending criteria would force credit unions to have regard to credit ratings used by the main banks and would remove the "common bond" ethos of the unions. This would effectively render them the same as the main banks, he said. "People who can't get bank loans will be in the hands of moneylenders."

A spokesman for the Central Bank maintained the action in appointing a special manager to Newbridge Credit Union was in the best interests of members and he reiterated the Central Bank’s position that there would “be no viable future” for Newbridge Credit Union unless it was merged with Naas.

He said there had been a “degree of non-typical lending” in Newbridge Credit Union and it would now need to rely on the Government’s contingency funds for a figure in the region of “tens of millions”.

Minister for Finance Michael Noonan has set up a €500 million fund to recapitalise struggling credit unions.

The Central Bank spokesman added that credit union services would remain available in Newbridge and that savers’ deposits of up to €100,000 remained guaranteed by the Government.

“The idea that there is a conspiracy to take the sector’s money and use it to bail out the banks has no basis” he said.