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Credit union at the centre of €700,000 fraud probe got €750,000 stabilisation in 2011

Rush Credit Union also made a loss of €2 million in 2011.

Image: Sam Boal/RollingNews.ie

RUSH CREDIT UNION, which was last week at the centre of a €700,000 fraud probe needed a three quarters of a million euro injection in 2011.

In the annual report for the last year for which accounts are available, Rush Credit Union also reveal that it had been given over €750,000 by the Irish League of Credit Unions (ILCU).

Sources close to the situation tell TheJournal.ie that a further €1.2 million has been set aside from the League’s Savings Protection Scheme (SPS) to plug another hole in the credit union’s finances.

It is believed that the credit union’s statutory reserves have dipped to around 2%, well below the 10% required by law.

However, it is believed the issues with reserves pre-date the fraudulent activity, which was reported to gardaí some time ago. A report on that matter is being worked on by auditors working closely wivth the Central Bank.

The 2011 accounts show that the institution had outstanding loans of €17.5 million in 2011, but had made a provision for €3.4 million of bad debts, nearly 20% of its loan book.

For context, many credit unions write off between 1% and 2% of their loans every year.

Rush Credit Union had written off €1.6 million and made a further provision for €1.3 million by the time the accounts were filed.

Confidential

Both the Central Bank, who regulate credit unions, and the ILCU said that they could not comment on the specifics of the case, citing confidentiality.

“We are prevented from commenting on matters related to the supervision of individual regulated firms,” said a Central Bank statement. The Central Bank has, however, stressed that all savings up to €100,000 are covered by the government Deposit Guarantee Scheme and that the credit union is trading normally.

This is echoed by Rush Credit Union which said last week it ”continues to operate as normal and provide all usual services to its members. There is no implication for the savings of any of our account holders”.

The Central Bank said it also couldn’t comment on why the credit union delayed holding its AGM. Legislation does allow annual meetings to be delayed with the consent of the Central Bank. These applications are examined on a case-by-case basis.

The ILCU says that the process is confidential and it cannot comment, but said the SPS was there to help the credit union trade out of difficulty.

“The Savings Protection Scheme (SPS) operated by the Irish League of Credit unions is primarily a stabilisation fund. In the rare event that a credit union shows signs of difficulty, the scheme can provide technical and financial assistance to stabilise the credit union and help it trade out of its difficulties.”

Accounts

Gardaí last week confirmed that they are investigating reports of financial irregularities at the credit union, believed to be related to €700,000 which is missing from the accounts.

The 2011 accounts show that Rush CU had total income for the year of €2.05 million, but total expenditure was €4.1 million, meaning a loss of €2.05 million. They also transferred €22,843 to the investment income reserve, this is another cost and brought the total loss to € 2,077,875.

As the accounts were signed off in May 2013, the figure given to Rush by the ILCU of €754,133 was what was required to get them to the 9% regulatory reserve required in 2012. This later became 10%.

The accounts also show that the 2011 AGM cost over €20,000 and an honorarium was paid to the treasurer of €5,000.

A spokesperson for Rush Credit Union had not responded at the time of publication.

Read: Gardaí investigating €700,000 missing from Dublin credit union

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