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Thread: New Bridge Credit Union Taken Over By Central Bank

  1. #31
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    Quote Originally Posted by C. Flower View Post
    Takeover done and dusted, went to the High Court this morning, but some people in Newbridge are kicking up.
    Not just Newbridge, Marion Harkin on RTE ranting about the CB tactics, gagging of appointees, no balance sheet after 22 months, attempt to gag the high court, etc. It stinks, all in the name of avoiding a run.... for community based institutions. Presumaby the capacity to ride roughshod is built in to the CB's rulebook by a couple of vague phrases in recent legislation??

  2. #32
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    Quote Originally Posted by barrym View Post
    Not just Newbridge, Marion Harkin on RTE ranting about the CB tactics, gagging of appointees, no balance sheet after 22 months, attempt to gag the high court, etc. It stinks, all in the name of avoiding a run.... for community based institutions. Presumaby the capacity to ride roughshod is built in to the CB's rulebook by a couple of vague phrases in recent legislation??
    Any particular legislation in mind ? The powers that Lenihan wanted to get for the Minister for Finance would have made Ghenghis Khan envious.
    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  3. #33
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    Brian Hayes on the news says Newbridge is the only one but Noonan told the Dáil there are at least thirty in September

  4. #34
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    Interim report of the Commission on Credit Unions 2011 found that

    27 credit unions were significantly under-capitalised and that there were questions about the capital adequacy of around 60 credit unions.

    http://www.rte.ie/news/2011/1014/creditunionreport.pdf

  5. #35
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    Quote Originally Posted by Dr. FIVE View Post
    Interim report of the Commission on Credit Unions 2011 found that




    http://www.rte.ie/news/2011/1014/creditunionreport.pdf
    And Noonan told the Seanad in October 2011 that the credit unions would cost between €500m and €1bn to sort out.
    Nobody seems to be asking the right questions today.

  6. #36
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    It appears that the Central Bank regulations on financial probity did not apply to Credit Unions until August of this year. So who's been regulating them up to now?
    Prior to August of this year, when new rules came into place, the Central Bank’s regulations on financial probity for the directors and managers of financial institutions did not apply to credit unions.Nor did it have any powers to directly sanction credit union directors or managers for rule breaches.
    Since August 1st, all credit union directors have to fulfil the industry-wide financial probity rules.
    http://www.irishtimes.com/business/s...tors-1.1591609

  7. #37
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    The Public Account Committee is to call in Patrick Honohan for further explanations, apparently.

  8. #38
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    The board have spoken and they are not happy bunnies -

    Statement on Behalf of the Board of Directors Of Newbridge Credit Union Limited
    November 13, 2013Reference
    Statement on Behalf of the Board of Directors
    Of Newbridge Credit Union Limited

    Introduction:

    The decision by the Central Bank to obtain a High Court Order to appoint a Special Manager to Newbridge Credit Union in January 2012 and now the Transfer Order were made on an ex-parte basis. This means that there was no opportunity for the Board to put forward its views.

    Now after two years of direct Central Bank intervention with all management responsibility in the hands of the Special Manager, what started as debatable concerns about bad debt provisioning ended up as an acute liquidity crisis forcing an urgent transfer to a commercial bank. Without contradiction, it is difficult not to be suspicious and not to believe the rumours which say that the CBI failed to find issues in our Credit Union that warranted its destruction, when a more measured approach would have dealt with the issues without causing such damage to it.

    The Resolution legislation, which was clearly designed for Banks and not Credit Unions, allows for matters to be dealt with in this fashion leaving the member elected Board with just one legal avenue open to it which is to apply to the Court to set aside its own decision.

    The Board of Directors are consulting with its legal advisors and others in the Credit Union Movement to assess how best to proceed whether by way of application to set aside the Transfer Order or have it varied or amended in particular respects.

    The Board is also anxious to ensure that the affidavits we filed at various junctures of the Special Management process are made available to the members and that there is a full investigation into the source of various leaks to the media at critical stages all of which have had a debilitating impact on the financial position of the Credit Union. This will also dispel offensive inaccurate remarks being made by some uninformed commentators.

    It is notable that the loan book continued to generate significant income during the past two years, thanks primarily to the continued and unflagging commitment of the staff, volunteers and members. The regulatory deficit which was a direct result of the increased bad debt provisioning policy adopted by the Special Manager did not increase during the past two years which indicates that the outflow of members’ savings in recent months has been entirely attributable to the mismanagement of the process and not any historical issues which prompted the intervention in the first place.

    Impact of the Loss of Credit Union Services:

    We fear the effects of this type of intervention will become more apparent in Communities throughoutIrelandin the coming months and years. These effects will be more immediate in Newbridge, and its surrounding common bond, as a result of the Central Bank’s actions and the failure of the Government to support communities. Some of the immediate effects on ordinary people will include a lack of access to fair credit, a lack of saving facilities and a significant loss of both financial and non-financial community support. The loss to local businesses and other organisations that depend on the Credit Union will also put pressure on them and jeopardise their future viability. It is important that people realise our Credit Union is the only institution that has ever been subjected to this untested action, and therefore we are unique. People must continue to support their Credit Union by continuing saving and repaying their loans.

    Points to note:

    Prior to the Special Manager being appointed, Newbridge Credit Union was solvent and had more than adequate liquidity. As members lost confidence due to the ongoing Special Management process, they withdrew their shares which resulted in the present position.
    The Judge did indicate that the Board, Volunteers and Staff had done no wrong in the case of Newbridge Credit Union.
    The Board at all times tried to work through the process by engaging with the Central Bank of Ireland, difficult though it was, and proposed a number of alternative solutions, as did others, which were disregarded or not cooperatively investigated in a timely fashion when there was more scope to turn them to good account.
    The large loans referred to do not in themselves contribute significantly to the problems at Newbridge Credit Union. It was the intervention of the Central Bank, at a time when it was proving difficult for members to survive and fulfil their commitment to the Credit Union.
    While the Act which was used to appoint the Special Manager does apply to Credit Unions it ought to have been apparent from the outset that it was only ever appropriate for Banks.
    The Board’s Statement issued back in January 2012 when this action started, highlighted the inappropriateness of the regulatory action, the evolution of our Credit Union, and its many, many strengths, that are still relevant today.
    Conclusion:

    The Board have always acted in the best interest of the Staff and Members despite the traumatic events of the past number of years.

    We would like to take this opportunity to thank the Members, Staff and Volunteers for their support, loyalty and understanding while the process evolved.

    We would ask that they continue to support the Credit Union, its co-operative ethos and principles.





    Board of Newbridge Credit Union Ltd

    12th November 2013
    Thomas Jefferson : Banking Establishments are More Dangerous to our Liberties than Standing Armies.

  9. #39
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    The Sindo claims the Directors were "warned" they were breaking the law

    Leaked documents obtained by the Sunday Independent reveal how the board of the credit union failed to rein in its lending policies in apparent defiance of the regulators.

    The credit union had lent huge sums to builders and developers during the boom but the documents reveal that when they were warned that they were breaking the law, the board claimed that it was the law that was at fault.

    At one fractious meeting with the then Financial Regulator, Liam O'Reilly, on December 15, 2005, the volunteer directors were told that they were "way outside" lending limits and had to "comply with the law".
    http://www.independent.ie/business/i...-29760537.html

    Why were laws viewed as flexible?
    Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. ~Oscar Ameringer

  10. #40
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    Quote Originally Posted by DCon View Post
    The Sindo claims the Directors were "warned" they were breaking the law



    http://www.independent.ie/business/i...-29760537.html

    Why were laws viewed as flexible?
    According to the Indo, there were no sanctions. There appears to be bad on both sides, in that the Regulator has taken a very different approach to loans by Credit Unions from bank lending.

    Where banks have been rolling debt over, Credit Union default, even small and short term, has been going straight to the Courts.
    At that time, there was no legal mechanism to take sanctions, despite the ongoing serious concerns of the financial authorities. New powers allowing enforcement action against directors and managers of credit unions only came in to effect last August.
    The regulator accused Newbridge of breaching sections 27 and 35 of the Credit Union Act, which include limits on the size of individual credit union loans and which cap the number of loans that can be repaid over five and 10 years.
    One local builder received loans totalling €3.2m over several years, which exceeded the legal limits. As of September, €2.8m was still owing on the loan.
    The Dail's Public Accounts Committee plans to question the Central Bank Governor Patrick Honohan about the Newbridge bailout.
    Mr Honohan has defended the regulation of the credit union, especially since 2009, when the Central Bank became aware of the scale of loans and lending practices.
    He told RTE's Prime Time last week: "We put in a special manager when it was clear that the existing management and directors were not capable or willing to do what was necessary."
    A former board member, who asked not to be named, insisted that Newbridge Credit Union was compliant with the rules within a year of meeting the Financial Regulator, forcing members with large savings to remove them.
    "The registrar, instead of helping credit unions to help their members, increasingly tightened the noose around members and their loan repayments," the former director said.
    "Volunteers in credit unions across the country have been targeted by the registrar and Central Bank. They know of the crippling regulation and reserve control practised by a Central Bank against people who work for the good of their communities without pay.

    “ We cannot withdraw our cards from the game. Were we as silent and mute as stones, our very passivity would be an act. ”
    — Jean-Paul Sartre

  11. #41
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    Quote Originally Posted by C. Flower View Post
    According to the Indo, there were no sanctions. There appears to be bad on both sides, in that the Regulator has taken a very different approach to loans by Credit Unions from bank lending.

    Where banks have been rolling debt over, Credit Union default, even small and short term, has been going straight to the Courts.
    There were only no sanctions because the government failed to do their job and legislate

    Much easier to hang around in tents at racing events drinking free pints
    Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. ~Oscar Ameringer

  12. #42
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    Default Re: New Bridge Credit Union Taken Over By Central Bank


  13. #43
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    Default Re: New Bridge Credit Union Taken Over By Central Bank

    Paddy is too cool to bother with the PAC

    Last week, the committee wrote to Prof Honohan demanding he come before them to explain the Central Bank's role in the €54m Newbridge Credit Union bailout, the Royal Sun Alliance affair, and the major breach in data protection involving thousands of credit cards.

    But it emerged that the governor, through his spokesman, had sent a letter rejecting the committee's request to come before it.

    The hearing heard that Prof Honohan felt it was not "preferable" to do so in the absence of a report from the Comptroller and Auditor General (C&AG), which is the normal basis of the PAC's investigations and hearings.
    www.independent.ie/irish-news/tds-hit-out-at-honohan-for-dail-noshow-29775234.html
    Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. ~Oscar Ameringer

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