We just handed over €54 million of taxpayers money to bail out a credit union after a court case heard in secret on a Sunday night. It is now 2pm and I have still not heard from Enda Kenny, Michael Noonan or anyone from the central bank. Were these not the same guys in opposition screaming about cloak and dagger stuff on the night of the bank guarantee. They really are spineless. I am sure they will be rushing to be on the evening news once the spin doctors have had a day to get everyone on message. Enda Kenny and his lack of engagement with the media at this stage is frankly embarrassing.
Newbridge credit union
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dereko1969
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http://www.irishtimes.com/business/...-don-t-apply-to-other-credit-unions-1.1591144
There ya go.
Why did the members in Newbridge who are now protesting not query the huge loans given to developers during the boom by their loans committee?
There ya go.
Why did the members in Newbridge who are now protesting not query the huge loans given to developers during the boom by their loans committee?
It wasnt only loans to developers. I know some that was in trouble with them a couple of years ago. He was given lots of small top up loans and ended up owing them an unsustainsble amount. He certainly had got nowhere near the savings required to receive that loan.
What seems bizzare is that those protesting about the takeover seem to want the State to put in the €50m but still leave the same people in charge. In comparison to Credit Union offices around the country, Newbridge seem to have invested millions into a plush office for its employees. And now that the value of the building has fallen (like most other properties) the CU refuses to write down the value of the building in its Accounts. That alone, apart from the apparent poor credit policy, justifies the decision to move the management.
The alternative is liquidation and how would protesters feel about that?
The alternative is liquidation and how would protesters feel about that?
Plenty of other CU's went that route. Look at Carlow and Bagenalstown!
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Yes, why should ordinary decent prudently managed credit unions (or the tax payers) bail out Newbridge Credit Union for very poor management over a decade or more?
What route did Carlow and Bagenalstown take?
Brendan Burgess
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Why are Newbridge members not welcoming ptsb?
If the government guarantee was not there, I presume that the members would have taken all their money out of the Credit Union and it would have collapsed.
Even with the government guarantee, Newbridge would not be able to pay dividends on its members shares for many years to come.
If Newbridge is in as bad a state as the Central Bank reports, then why on earth would another credit union get involved in rescuing it. Again, only because the government pumps money into it.
The CB should offer the members a choice - Get taken over by ptsb or stay independent. But if you stay independent you lose the government guarantee.
Newbridge Credit Union is in some sort of trouble and we can argue about the severity of that trouble. But if the Central Bank's assessment is right, the members would have lost a large part of their savings. Of course, they are not at risk because of the government guarantee.
If the government guarantee was not there, I presume that the members would have taken all their money out of the Credit Union and it would have collapsed.
Even with the government guarantee, Newbridge would not be able to pay dividends on its members shares for many years to come.
If Newbridge is in as bad a state as the Central Bank reports, then why on earth would another credit union get involved in rescuing it. Again, only because the government pumps money into it.
The CB should offer the members a choice - Get taken over by ptsb or stay independent. But if you stay independent you lose the government guarantee.
Why was the court case heard in secret. If PTSB will be at zero loss from taking over the credit union, having been paid 53 million, why didn't the central bank give the 53 million to Naas credit union to take over Newbridge. Was the offer even on the table. And if not why not.
Alternatively why not give Newbridge itself 53 million in return for a change of management, those that mis managed shouldn't be rewarded and continue in a position of trust. Though as I write this I think of the bailed out banks, where plenty of management stayed in place or walked away with gold handshakes.
If the government was truly committed to choice for consumers, in banking, why restrict that choice to a failed bank taking over a credit union.
Who identified the figure of 53 million. Was it Newbridge, the Central bank, or did PTSB decide the figure. Did Naas know of the 53 million deficiet.
Someone mentioned if the CU went into liquidation that savers would lose out. But how so, what percentage of the savers would have more than 100K in savings in a single account. Anyone with that kind of money would have known about the rumours about this credit union for many months now and would have reduced their exposure to nil by bringing their saving to 100K. If there is any individual, or institution that has more than 100K, than after all that has passed in the last 7 years, they are idiots.
While talking about those with more than 100K. It's very odd, to me, that there would be a lot of people with such large lump sums in an institution that is known to have issues or even one where there are no issues. Surely at this stage there is nobody that keeps more than that in any one place.
If the government try this tack with my credit union, or my husband's we will move to another credit union. No way would I accept going to a bank. I cannot wait until the day I never have to deal with a bank again.
Alternatively why not give Newbridge itself 53 million in return for a change of management, those that mis managed shouldn't be rewarded and continue in a position of trust. Though as I write this I think of the bailed out banks, where plenty of management stayed in place or walked away with gold handshakes.
If the government was truly committed to choice for consumers, in banking, why restrict that choice to a failed bank taking over a credit union.
Who identified the figure of 53 million. Was it Newbridge, the Central bank, or did PTSB decide the figure. Did Naas know of the 53 million deficiet.
Someone mentioned if the CU went into liquidation that savers would lose out. But how so, what percentage of the savers would have more than 100K in savings in a single account. Anyone with that kind of money would have known about the rumours about this credit union for many months now and would have reduced their exposure to nil by bringing their saving to 100K. If there is any individual, or institution that has more than 100K, than after all that has passed in the last 7 years, they are idiots.
While talking about those with more than 100K. It's very odd, to me, that there would be a lot of people with such large lump sums in an institution that is known to have issues or even one where there are no issues. Surely at this stage there is nobody that keeps more than that in any one place.
If the government try this tack with my credit union, or my husband's we will move to another credit union. No way would I accept going to a bank. I cannot wait until the day I never have to deal with a bank again.
Brendan Burgess
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Hi Bronte
A lot of interesting points there.
All the depositors in Newbridge/ptsb are free to withdraw their money and put it wherever they like. I presume that Naas and other local Credit Unions will accept them as members. But if all the deposits in Newbridge went to Naas, it would cause huge problems for Naas.
A lot of interesting points there.
The Central Bank did agree to indemnify Naas against losses from Newbrige. I am not sure of the mechanism, but I think it was from a direct input of cash.
Newbridge failed as a Credit Union and I think it's right to close it down. I would go further and say that the members should have lost their money, but that is not government policy.
They tried to get Naas to take it over, but they refused. The CB had no other option.
I suspect that it was ptsb who insisted on a figure this high.
I heard somwhere that there was only €2m in excess of €100k. So most did take it out.
All the depositors in Newbridge/ptsb are free to withdraw their money and put it wherever they like. I presume that Naas and other local Credit Unions will accept them as members. But if all the deposits in Newbridge went to Naas, it would cause huge problems for Naas.
If the CB agreed to indemnity Naas, that it doesn't make sense that Naas refused the business.
We didn't close down many of the banks that failed, so I don't agree that we should close down Newbridge by getting a failed bank to take it over and apparently said bank has dictated the figure to the CB. PTSB are as good as the Newbridge lot. So a wipeout of management at Newbridge would equally have been as good a solution, in my opinion. And if PTSB dictated the 53 million, would a new board of management at Newbridge have cost less.
Re the 2M. So if Newbridge went bust, some people would have lost 2 Million, but everbody else would have been fine. Would the vast majority of people have been better off if Newbridge were liquidated.
Why would it be a problem for Naas if all the deposits went to Naas, in any case if people were moving, they'd also like to move their loans.
Interesting that the PTSB have 'hinted' that they will pay the Newbridge clients an unspecified 'dividend.' Sounds like bribary to me, and using our taxpayer money to do it too. Bit like AIB making it's staff redundant and giving them more than statutory with once again, our taxpayers money. They are all so amazingly generous.
Look at Rathfarnham CU. They must have been going for an award for the ugliest building of the year when they built that.
Did a lot of credit unions buy/build new offices during the boom?
The other credit unions can not accept them as members as their common bond does not cover the geographic area that Newbridge credit union covered. There is talk of extending the common bonds in which case Naas could open a sub office in Newbridge and start from a clean slate.
Deposits are a huge problem for the credit unions, with more money going in to reserves and other money that credit unions have on deposit with the banks making very little interest, the credit unions are relying on a shrinking loan book to cover increased operational costs. There are few credit unions that would welcome a large influx of deposits.
Well it would presumably be very silly to sell them in the current market.
newirishman
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Why not just let the CU fail? Hardly "too big" or of any systemic relevance.
I guess the the two reasons for not letting it go down is that it might be more expensive for the taxpayer due to the €100K savings guarantee, and that the government doesn't want to put any uncertainty around the CU's.
Personally after living in Ireland for more than a decade I still don't understand what the point of the credit unions is t.b.h.
Must be cultural.
The point of credit unions as far as I can see is to give people who the banks have no interest in lending to access to credit, if you are not in that category then I can see how you would not understand what credit unions do. Admittedly some lost the run of themselves but there are still some very well run ones around that give a very valuable service.
There is no reason to save it. Apparently a school, a charity and a couple of hundred individuals had over €100k on deposit. Am sorry for them but it is their own problem. Everyone is aware of the risks. This is taxpayers money again being used. If they need more than €250m for credit unions, they levy the banks so again consumers will end up paying for it. I could understand not allowing a bank fail back in 2008 considering the environment at the time but I struggle to understand this. There wouldn't be any contagion. The issues with credit unions are well known at this stage. If RSA didn't have a strong parent, we would have to have bailed them out as well. Where does it all end?
I agree there are some really well run credit unions but there are some shocking ones being run by amateurs albeit good intentioned amateurs for the most part.