DUBLIN, Ohio—This country’s Credit Union Restructuring Board, which is charged with propping up and reforming Ireland’s credit unions, has so far drawn down just €3.5 million, or less than 1.5%, of a €250 million fund set up by a the government for recapitalization.
One-third of that €3.5 million has been used for operational costs, according to information released during a hearing of the Public Accounts Committee.
The Credit Union Fund was established in 2012 and the Credit Union Restructuring Board, known as ReBo, was created Jan. 1, 2013 to oversee administration of the funds. The Credit Union Fund is to support credit unions that have inadequate reserves, to assist in funding operational costs, and to help with any voluntary restructuring effort.
During the hearing, however, it was learned the ReBo could not provide any money from the fund until Nov. 28, and that it is further predicting that much of the money will never be tapped. ReBo’s interim chief executive, John Doyle, told the hearing the Board is “entirely bound” by a specific piece of legislation that limits what it can and cannot do.
ReBo is reportedly working with as many as 150 of Ireland’s credit unions, approximately half of all the assets held by the country’s CUs, and has found it has been able to conduct many restructurings using those CUs’ existing capital without having to touch The Credit Union Fund.
Doyle called that development “very positive.”
“What we’ve come across thus far — and we have interacted with every credit union in the country that will meet with us and in the 150 proposals that are in front of us — that credit unions are solving these problems themselves in 90% or 95% of cases; these issues are being addressed from within the existing capital structures of the credit unions,” Doyle told the hearing. ““You [also] have the issue of [the fund’s] relative unattractiveness to credit unions insofar as taking on debt at 5%, 6% or 7% in the current environment is difficult for credit unions.”
To date, ReBo has facilitated eight restructurings involving 20 credit unions.