Merger concerns for credit unions
THE credit union sector faces "merger mania" if the plan to link smaller institutions with larger ones is not managed correctly, regulators fear.
The bank's registrar of credit unions, James O'Brien, said that a chaotic approach to the mergers will have a devastating effect on the local community institutions.
At the moment, almost all credit unions are individually run and managed, with separate boards. But although there are more than 400 throughout the State, this number is expected to be halved over the next two years.
"The prospect of unplanned merger mania where credit unions jockey for position within the sector is also a concern for us," Mr O'Brien told the Credit Union Managers' Association spring conference. "Ill-thought out voluntary mergers happening in a chaotic fashion with little professional oversight of the restructuring process could have a catastrophic impact on the sector where the outcome creates bigger weak entities incapable of developing."