Independent TD Mattie McGrath has described the takeover of Newbridge Credit Union in County Kildare as a move that will deeply disturb the hundreds of thousands of families who rely on their local Credit Union as a reasonable and flexible community based institution.
Deputy McGrath was speaking after The Central Bank confirmed that it has transferred Newbridge Credit Union to Permanent TSB. Permanent TSB has now assumed ownership and management of the customer assets and liabilities of the credit union:
“I am sure that there are many thousands of families, SME’s and community project managers who are waking up this morning with a shivering sense of Déjà vu about this latest development. Any move like this which is effectively a bailout for a very troubled credit union is bound to have people thinking that the one place they thought there savings were safe is now threatened by knock on effects. We should certainly not add fuel to the fire concerning how healthy other local branches are, since the vast majority are managing their resources very responsibly. Indeed it needs to be stressed that Newbridge is not even affiliated with the Irish League of Credit Unions, the unions which the vast majority of people will have dealings with. That being said we do need to engage in an urgent debate around finding means to strengthen this crucial pillar of community life because while Newbridge stands outside the Irish League, several others do not and that needs to be looked at immediately.”
All services, including deposit and lending facilities, continue to be available to all members from the credit union premises which will open as normal today. The Central Bank has said that its priority at all times is the protection of members’ savings and the maintenance of the financial stability and well-being of credit unions generally, in line with the Bank’s mandate. It also said that the only alternative option was a full-scale immediate liquidation of the credit union. This would have interrupted member’s access to their funds and risks to depositors not covered by the Deposit Guarantee Scheme:
“We have a dark and troubled recent history when it comes to the intervention of Government into troubled financial institutions. What I do not want to see is the whole process which must now happen concerning the viability of the majority of Credit Unions descend into the kind of cloak and dagger negotiations which will result in a very unhealthy intrusion of the banking sector into this area. The banks have a particular way of dealing with individuals and business that is completely at variance with the spirit of the Credit Union movement. It would be an absolute disaster if the vulture practices of these banks were somehow replicated within the different branches of Credit Unions which may find themselves In a similar scenario to Newbridge. The Credit Unions of this Country have without a shadow of doubt been the only lifeline that many families have relied on during the course of this economic mess and anything which undermines their capacity to deliver similar services going forward must at all costs be strongly resisted,” concluded Deputy McGrath.