Wednesday, July 23 14:16:51
Following an application by the Central Bank, the High Court has today approved the appointment of a provisional liquidator to Berehaven Credit Union in Co Cork.
The Central Bank said it took this action because Berehaven Credit Union was no longer viable as a stand-alone credit union. Alternative options to resolve the serious financial difficulties at the credit union were examined but were found not to be feasible, the regulator said.
Members' eligible deposits will be compensated by the Deposit Guarantee Scheme. The appointment of the provisional liquidator does not have any impact on members' savings in any other credit union, it said.
Berehaven Credit Union had serious financial difficulties due to poor governance, lending practices and a lack of internal controls, which the Central Bank has engaged with the credit union on in recent years in an attempt to find a resolution. The Central Bank said its main objective when resolving credit unions in difficulty is to find a credit union based solution that maintains services in the local community.
"In this case the Central Bank examined all available options, including a directed transfer to another credit union. However, while a transfer bid was received from another credit union, the financial support required was significantly greater than the estimated cost of liquidation. On this basis the liquidation of Berehaven Credit Union was the only option available. The Board of Berehaven Credit Union actively engaged with the Central Bank in seeking a resolution in recent weeks and did not oppose the appointment of a provisional liquidator."
"Following the appointment of the provisional liquidator, the Deposit Guarantee Scheme has been invoked. Members of Berehaven Credit Union will receive compensation in respect of their eligible deposits up to E100,000 per person. Compensation payments will automatically issue to the address held on file by the Credit Union. The Central Bank expects to be in a position to issue duly verified compensation payments to members shortly."
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