Reassurance on credit union

The Irish Financial Services Regulatory Authority and the Irish League of Credit Unions (ILCU) both moved yesterday to reassure members of Monaghan Credit Union over solvency concerns.

The financial regulator issued a statement to the credit union's 17,000 members saying they "should not be concerned about their savings".

The registrar of credit unions, Brendan Logue, said he was satisfied that the credit union was solvent and that it had the means to meet member loan needs and savings withdrawals.

Members were also told that the credit union had the support of the Savings Protection Scheme of the Irish League of Credit Unions. The union could call on this scheme for financial support, "in the unlikely event of this being necessary", according to the regulator.

"The Savings Protection Scheme is backed by a very substantial fund held by the Irish League of Credit Unions," Mr Logue said in a statement.

Worries over solvency at Monaghan Credit Union arose after its annual general meeting on Wednesday. The accounts under review included a €7.15 million write-off for historical bad debts, which caused members some anxiety.

They were already aware that the registrar of credit unions, Mr Logue, had instructed the union that it was not to pay a dividend to its members. The instruction came because Mr Logue did not accept that the union had a surplus sufficient to cover its 2005 bad debts.

The ILCU yesterday expressed satisfaction with Monaghan Credit Union's solvency and positive trading position.

Following the write-off of bad debts, Monaghan now has a solvency ratio of 110 per cent, higher than the average of 108 per cent. At the end of March, it had assets of €101 million and a surplus of €1.9 million.