Somewhat ironically, in the same month, the Central Bank published its most recent settlement agreement (7th November) within the administrative sanctions regime, it was against a Credit Union and involved breaches of the existing lending rules.
Savvi Credit Union was fined €185,500 and reprimanded for failing to comply with the limits for long term loans and also reimbursing travel expenses to a Director (totalling €28,341 over 4 years), at rates in excess of Civil Service rates. You can read the full settlement agreement here
As we usher in the 2020’s, it is worth noting that the Central Bank of Ireland has consistently issued fines, reprimands and taken enforcement action against Credit Unions on an annual basis since 2012. Failures vary from mismanagement of internal controls and governance arrangements, fitness and probity to AML breaches. Fines have ranged from €198,000 to as little as €5000 for failures in complying with prudential regulatory returns.
Ringing in the new year should allow for the Credit Union Sector at least the opportunity to provide more loans to support their members with the added Christmas bonus of more local options for the Irish consumer. Let’s hope it doesn’t give rise to another enforcement action.
By Judy De Castro - Regulatory Consultant