Fermoy Credit Union Board reassures members

Following the article which appeared in The Avondhu last week about the possible impact to Fermoy Credit Union arising from the liquidation of IBRC, the Board of Directors would like to reassure its members on the financial stability of the credit union. Treasurer Pat Culloty stated that Fermoy Credit Union Limited entered into a deposit structured investment with Anglo Irish Bank in June 2005.

“The product was capital guaranteed with a guaranteed return of 12% over a term of 8 years and 3 months and was due to mature in September of 2013. There is concern that the deposit may not now realise its full value as a result of the liquidation of IBRC.

“Despite a letter to Minister Michael Noonan and letters to the joint liquidators, no confirmation has been received as to how this deposit will be dealt with in the liquidation process. The credit union board and management have been proactive in their response to the liquidation of IBRC and have sought advice from various sources on the possible impact to Fermoy Credit Union as a deposit holder. The investment remains at full value of €1,680,000 on the credit unions financial accounts”

The treasurer continued to state that members’ savings and deposits within Fermoy Credit Union are safe. “We are open for business and have money available to lend. The balance sheet of the credit union is strong with reserves in excess of 13%, which is well above the minimum level determined by the Central Bank of Ireland. The protection of member’s savings and the provision of equitable financial services to members remains the priority of the Board of Directors.

“There is much speculation that some IBRC deposits will be treated as unsecured creditors and losses may be sustained as a result of this. Should this event occur, Fermoy Credit Union will still remain secure. A stress test of the balance sheet shows that even if all of our deposit in IBRC is lost, our reserves will continue to stay above the 10% mark, as required by the Central Bank. On a positive note the Central Bank has this week relaxed lending and investment restrictions in place within Fermoy Credit Union. This is a very positive development and will allow the credit union to increase its income and therefore its operating surplus. It also means more money is available to meet our members’ borrowing needs.

The treasurer concludes by saying it may be some time before clarity is provided on this matter as the liquidation process and the sale of assets of IBRC continues.

“Fermoy Credit Union Limited is one of twelve credit union around the country whose deposits with IBRC have been put at risk because of this sudden liquidation. We call on Minister Noonan to ensure that Ireland is not the first Eurozone country to let deposit holders lose their funds and urge him to provide clarity to credit union members on how this deposit will be treated.