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TRALEE and Killorglin Credit Unions have combined after an application by the Central Bank of Ireland to the High Court yesterday.
The high approved the transfer of Killorglin Credit Union (KCU) to Tralee Credit Union (TCU) which now makes TCU the largest community based credit union in Munster with total assets of almost €170 million.
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Tralee Credit Union has assumed ownership and management of the assets and liabilities of the Killorglin credit union.
The Central Bank sought the transfer, with the support of the current Board of Killorglin Credit Union, because the credit union was no longer viable as a “stand alone” entity.
In a report prepared by the special resolution unit (SRU) of the Central Bank, a decision to invest €5.4 million in a new premises that is now worth €450,000, poor corporate governance and potential losses on a series of “bullet loans” with delayed repayments, were the causes of KCU’s problems.
The SRU’s report warned of the possibility of a run on KCU if members found out what was going on.
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The transfer was undertaken to protect members’ savings and ensure continued access to credit union services within the community.
The transfer has no effect on the day to day operations of the Killorglin office, and members will continue to do business as normal from their office in Mill Road.
All services including savings and lending facilities continue to be available to all members from the credit union which will open as normal. KCU members do not need to take any action, they will be notified by post about the transfer over the coming days.
Like TCU members, KCU now share equal membership and ownership of Tralee Credit Union. Their savings are also automatically covered and protected under the Government Deposit Guarantee Scheme up to €100,000 per account.
“The Board of KCU has worked closely with the Central Bank to resolve our issues and the entire Board wholeheartedly supports this immediate transfer,” said Pat Duffy KCU, Manager.
“The financial issues were as a result of the redevelopment of the premises in 2005 and subsequent decrease in its carrying value. It was also related to poor lending practices and inadequate credit control systems prior to June 2010,” he said.
“Having reviewed all options, the Board feel that this transfer is in the best interest of our members and will bring certainty for the future of the credit union. We will now operate under the management of TCU,” Mr Duffy added.
Tralee Credit Union’s CEO Fintan Ryan said “we would like to thank and acknowledge the hard work of KCU’s Board, Management and Staff who have worked very hard in the last four years trying to keep their credit union operating as a viable business. The Central Bank are assisting with the transfer and are supporting it with a financial package that will safeguard the current reserves of Tralee Credit Union.”
“We are confident that the combined entity, with assets of €169 million will have an ability to be an extremely positive influence on the financial lives of all our members. Coming together will make us the largest community based credit union in Munster with in excess of 41,000 members. We are now well positioned to provide a wider range of services to members. With combined savings of €148 Million and with a Loan Book of €55 Million, we have money to lend and we are lending,” said Mr Ryan.
It will take until Spring 2015 to fully integrate the computer systems, services and the accounts of both credit unions. When completed, all members will have access to their accounts in three offices in Tralee, Castleisland and Killorglin.
In the meantime, members in the Killorglin area will continue as normal to use their credit union in Mill Road, Killorglin.
According to Fintan Ryan, TCU has weathered the financial storm well and has paid a Dividend on member’s savings every year. This week Tralee Credit Union savers received 1% Dividend and borrowers a 5% Loan Interest Rebate. Tralee Credit Union is confident that it will continue to pay a dividend into the future.
Information on this transfer is available on www.traleecu.ie and on www.killorglincreditunion.ie
