# Should Charleville Credit Union be wound up?



## Brendan Burgess (31 Mar 2017)

Charlie Weston's article:
*Collapse of merger for debt-ridden credit union*

They admit in their letter to members that they are unsustainable given the restrictions that the Central Bank imposed on them.    They also claim to be solvent, although I don't know when accounts were last published.

There is no logic to weakening another credit union by merging with them.

Charleville should be wound up.  Stop issuing new loans, repay the members' shares and gradually collect in the loans.

They made bad decisions.  The taxpayer should not have to pay for these bad decisions by paying for it to merge or further guaranteeing its members' shares.

It's possible that the current board is not responsible for the errors of the previous board and management - I just don't know.  Maybe they have tried to fix the problems and are not getting any latitude from the Central Bank.

But as a taxpayer, I don't want to be on the hook to bail out the members of another credit union.

Brendan


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## Brendan Burgess (31 Mar 2017)

As a general rule, most Credit Unions should probably be wound up. They cannot operate sustainably in a market where there is no demand for loans and they can't get any return on their members' surplus cash. 

Brendan


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## Bronte (31 Mar 2017)

Is there not a demand for loans if the interest rate is better than banks. For example car loans and we saw that the Revenue CU offered home loans that people on here would have loved to be able to get.


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## Páid (31 Mar 2017)

I'm not an expert but isn't the taxpayer on the hook already for at least some of it as deposits are guaranteed;


http://www.consumerhelp.ie/deposit-guarantee-scheme
https://www.depositguarantee.ie/en/home


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## Slim (31 Mar 2017)

Brendan Burgess said:


> But as a taxpayer, I don't want to be on the hook to bail out the members of another credit union.
> 
> Brendan



Surely, this is most unlikely as the ILCU SPS is self funded and the State Deposit Guarantee is funded by a levy on all financial institutions. It seems that most of the credit unions that are in difficulty have either lent unwisely or unluckily, allied with poor investment returns/write offs. They are required to hold substantial reserves against bad debts and this puts pressure on falling income from investments allied with poor loan repayments. Other than the deposit guarantee which is not a burden on tax payers, it seems unlikely the State would carry any of the losses.


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## Elnino (12 Apr 2017)

Páid said:


> I'm not an expert but isn't the taxpayer on the hook already for at least some of it as deposits are guaranteed;
> 
> 
> http://www.consumerhelp.ie/deposit-guarantee-scheme
> https://www.depositguarantee.ie/en/home



Actually the deposit protection scheme fund run by the Central Bank is funded by financial institutions not the tax payer. In the case of Rush Credit Union all the deposits up to €100,000 were refunded by the scheme and the banks and other credit unions had to make up the shortfall in the fund.


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