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City credit union to be liquidated in 'members' interests'

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Drumcondra and District Credit Union will close its doors

Drumcondra and District Credit Union will close its doors

Drumcondra and District Credit Union will close its doors

The Central Bank has got the High Court to agree to the appointment of a liquidator to Drumcondra and District Credit Union in Dublin.

Regulators insisted the action was taken in the best interests of members and the wider public.

Savings of members are covered by the State Deposit Guarantee Scheme.

It is the latest of a small number of credit unions that have got into trouble and been forced to close.

Newbridge, Rush, Charleville and Berehaven have been shut down by regulators in the past few years.

Drumcondra is understood to have struggled for years to build up its capital level to satisfy regulatory rules.

A sharp depreciation in the value of its premises meant its balance sheet took a hit.

Savings

The Central Bank stressed that the move to have liquidators appointed was not related to the exceptional circumstances of Covid-19.

It is understood the credit union has around 5,000 members, savings of €13m and assets of around €14m.

Stephen Tennant and Nicholas O'Dwyer of Grant Thornton have been appointed as joint provisional liquidators.

The regulator said in a statement: "The Central Bank has been engaging with Drumcondra Credit Union to address its long-standing challenges connected with its financial viability.

"Despite efforts by Drumcondra Credit Union to overcome those challenges through a voluntary transfer of engagements, all potential solutions available to the credit union were ultimately unsuccessful."

The credit union's board has been co-operating with the Central Bank at all times, including in the appointment of the liquidators, the bank said.

The appointment of joint provisional liquidators to Drumcondra Credit Union will not impact on members' savings in any other credit union, regulators said.

Action

The State Deposit Guarantee Scheme will cover deposits up to €100,000 per person affected.

Payments will automatically issue to the address held on file by the credit union.

Members do not have to take any action themselves.

There are around 240 credit unions in the State.