CU board & auditors recommend 1.5% divident but ONLY if the CU regulator approves.

D

donee

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hi,

Ive just been to my local CU and I enquired about the AGM and I also asked about dividend etc.

I was told that the recommendation from board and auditors is for 1.5%, but ONLY if the regulator approves it.

Why the heavy hand of regulation on the little guy's money and/or is it the same in the banks
 
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I know its not the same kind of dividend but have any banks paid dividends to their shareholders in recent years?
 
donee said:
hi,

Ive just been to my local CU and I enquired about the AGM and I also asked about dividend etc.

I was told that the recommendation from board and auditors is for 1.5%, but ONLY if the regulator approves it.

Why the heavy hand of regulation on the little guy's money and/or is it the same in the banks
Click to expand...

Because approximately 80 CUs could not pay any dividend last year and a number are in some difficulty this year and may be next year due to poor management and lending practices.
 
sorry maybe im not making the point clearly.
if the CU obviously CAN afford to pay a dividend and their AUDITORS who would have the overall picture have signed off that they can why the need for the regulators approval
 
Because, in the words of the regulator "... directors will .. be required to strike a balance between dividend distribution policy and the retention of reserves to protect members’ savings and the future of their credit union."

aj
 
ajapale said:
Because, in the words of the regulator "... directors will .. be required to strike a balance between dividend distribution policy and the retention of reserves to protect members’ savings and the future of their credit union."

aj
Click to expand...
and the directors and their auditors dont
 
Judging by information already available online the CU regulator has previously intervened to block or allow dividends approved by individual CU's - even after the boards in question have approved the payment and the auditors have signed off on accounts - e.g.:

http://www.independent.ie/business/irish/regulator-clears-monaghan-credit-union-dividend-81775.html
[broken link removed]

This may also be relevant:

http://www.examiner.ie/ireland/fina...redit-unions-to-exercise-prudence-123984.html

In the letter the regulator says he will be requesting the movement as part of the year-end audit, to place particular emphasis on the adequacy of the bad debt provisions in the 2010 accounts.

It also makes clear that units of the movement will be required to make a submission in relation to the payment of a dividend.

Those credit unions which have to make a submission on the payment of a dividend have been instructed in the letter not to set a date for their Annual General Meeting and that they should not print the annual accounts for circulation to members until agreement has been reached with the regulator on the dividend payment question
Click to expand...
 
donee said:
and the directors and their auditors dont
Click to expand...

Yes, while the majority of CUs (through their directors and auditors) manage to "strike a balance between dividend distribution policy and the retention of reserves to protect members’ savings and the future of their credit union" a small minority clearly do not. And this is where the regulator is mandated to step in and ...well...regulate.

aj
 
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