Newbridge Credit Union's "Special Manager"

later12

Interesting development today at one of Ireland's most roguish credit unions as it emerged that the commercial court has appointed a"special manager" to Newbridge.

The Commission on credit unions last year indicated that 27 credit unions were in serious need of recapitalisation (reserves<7.5%).
http://www.finance.gov.ie/documents/publications/reports/2011/credit.pdf

Interestingly, Newbridge Credit union is open tomorrow, along with most large credit unions. Although all CU deposits up to €100,000 are protected, it will be interesting to see if this incident resonates at all with its members, in Newbridge or elsewhere.

Damien360

later10 wrote: »

Interesting development today at one of Ireland's most roguish credit unions as it emerged that the commercial court has appointed a"special manager" to Newbridge.

The Commission on credit unions last year indicated that 27 credit unions were in serious need of recapitalisation (reserves<7.5%).
http://www.finance.gov.ie/documents/publications/reports/2011/credit.pdf

Interestingly, Newbridge Credit union is open tomorrow, along with most large credit unions. Although all CU deposits up to €100,000 are protected, it will be interesting to see if this incident resonates at all with its members, in Newbridge or elsewhere.

My wife passed it today and it was very full with people. I am assuming they were doing exactly what I intend to do tommorrow morning, which is removing all my savings. Considering there will be a genuine run on the bank, I would bet that it will be closed early with much shouting by the board that this injustice was caused by the central bank. (a familiar story taken from AIB, BOI, Anglo etc)

Last years AGM (which I attended) was a joke. No explanation of very odd loans and or the bad debt provision. Normally you can get a small multiple of your savings as a loan and your savings are locked in until final payment. They handed out loans to developers, breaking their own rules, with no cover whatsoever. Some of those properties have gone to NAMA and one large apartment complex in the town at langton cross had the glory of being NAMA's first sale. This is one of the losses the credit union got hit with.

We were given a great deal of promises that all was fine at the AGM and we personally kept our money there on the basis that the banks were not much better and there was a slight risk of loosing savings to a failed bank. As of 12 months ago that was a real prospect.

Last years accounts showed they were well ahead of the loan to savings ratio required by the central bank including the current well flagged level of 10%. I can only assume that they had to face much bigger debts this year and that killed the ratio.

Newbridge is not a wealthy town and I would compare it to Tallaght in relation to demographic with crap policing to boot. It is very conceivable that a large number of the town cannot pay off loans regardless of how small they are. That will put the nail in the Credit union coffin.

badgerbroc11

This is dissapointing news for the vast majority of credit unions which were well run and stuck to their core operating principles. I'd imagine that other credit union will see a big increase in withdrawals as peoples concerns grow.

Willow20

Damien360 wrote: »

later10 wrote: »

Interesting development today at one of Ireland's most roguish credit unions as it emerged that the commercial court has appointed a"special manager" to Newbridge.

The Commission on credit unions last year indicated that 27 credit unions were in serious need of recapitalisation (reserves<7.5%).
http://www.finance.gov.ie/documents/publications/reports/2011/credit.pdf

Interestingly, Newbridge Credit union is open tomorrow, along with most large credit unions. Although all CU deposits up to €100,000 are protected, it will be interesting to see if this incident resonates at all with its members, in Newbridge or elsewhere.

My wife passed it today and it was very full with people. I am assuming they were doing exactly what I intend to do tommorrow morning, which is removing all my savings. Considering there will be a genuine run on the bank, I would bet that it will be closed early with much shouting by the board that this injustice was caused by the central bank. (a familiar story taken from AIB, BOI, Anglo etc)

Last years AGM (which I attended) was a joke. No explanation of very odd loans and or the bad debt provision. Normally you can get a small multiple of your savings as a loan and your savings are locked in until final payment. They handed out loans to developers, breaking their own rules, with no cover whatsoever. Some of those properties have gone to NAMA and one large apartment complex in the town at langton cross had the glory of being NAMA's first sale. This is one of the losses the credit union got hit with.

We were given a great deal of promises that all was fine at the AGM and we personally kept our money there on the basis that the banks were not much better and there was a slight risk of loosing savings to a failed bank. As of 12 months ago that was a real prospect.

Last years accounts showed they were well ahead of the loan to savings ratio required by the central bank including the current well flagged level of 10%. I can only assume that they had to face much bigger debts this year and that killed the ratio.

Newbridge is not a wealthy town and I would compare it to Tallaght in relation to demographic with crap policing to boot. It is very conceivable that a large number of the town cannot pay off loans regardless of how small they are. That will put the nail in the Credit union coffin.

Damien 360
A "special manager" is a good thing for this company. Read michael noonans piece on the web. It does not mean there were shady goings on, there are regulatory concerns and it was clearly stated on the news that it is entirely solvent and secure - And I sincerely hope you have solid back up for your statement above on a public forum - stating that "they gave loans to developers ...... Some of these properties are now with NAMA......this is one of the losses they got hit with " How exactly would you have that detailed info - irresponsible loose talk like this is unfair to a local business when you clearly have not got your facts right.
At least be factual and not sensationalizing gossip you heard elsewhere.

later12

Willow20 wrote: »

Damien 360
A "special manager" is a good thing for this company.

Only if the other alternative is winding up.

In day to day life, in terms of what we expect from our financial institutions, having an official appointed to the institution from the central bank following o from concerns for its financial position is not "a good thing"

it was clearly stated on the news that it is entirely solvent and secure

Depends what you mean by solvent. Newbridge had to make provision on €20 million of its bad debt in 2010 alone. It's likely that more concerns arose over year-end provisions for 2011. If there were to be a run on Newbridge Credit Union, the solvency of that credit union can and should be legitimately questioned. Obviously, the DoF cannot exactly publish that on its website, can it?

badgerbroc11

The central bank are not going to go to the courts and use their special powers if everything is rosy in the garden. Todays Irish times has an interesting article: http://www.irishtimes.com/newspaper/frontpage/2012/0114/1224310245967.html

If it is true that there was a history of regulatory breaches, I would my opinion that the regulator is doing the right thing and this action will ensure that the small minority of credit unions that were not acting correctly will now straighten themselves out.

Has Newbridge Credit Union board issued a statement yet?

In the long run this will strengthen credit unions.

SPDUB

According to the RTE 8am news the "Special Manager" is being paid his hourly rate even though he's being appointed for an indefinite period .

Nice to know the Central bank tried to get value for money :rolleyes::rolleyes:

whitleydonal

When the central bank makes a move the public the media and politicans cheer and say that it is right. The central bank were fully engaged with Newbridge credit up to an including the day the bank went off to the courts ex-Parte (without telling the credit union or inviting it to defend the action) and installed a special manager at a cost of 423 euro per hour or on a conservative working week of 37 hours that comes to 813,000 per year and that may not include vat @ 23% this bill under the legislation will be picked up by the credit unions members. The registrar of credit unions has refused to allow newbridge credit union call its annual general meeting, the accounts are ready and agreed with the auditors. It appears that the manager employed by the credit union will have to be sent on gardening leave. its a pity the bank did not investigate the mis-selling of bonds to credit unions with the same gusto as he appears to have in taking action against credit unions.

I would ask you to remember that credit unions were the only institution lending to ordinary joe's for the last three years as the bank were and are still are not working. There are a number of serious questions need to be answered in this case namely

Why was th application made ex-parte to the courts as there was no urgency in the matter this move denied the credit union the right to reply?
(make the matter sub-judice and silence the board)

Why is the board of directors forbidden communicate directly with the members or issue a statement unless it is cleared by the central bank?

Why is the credit union not permitted to hold its AGM or call a special general meeting to give the members the opportunity to be fully informed?

Why is the Special Manager costing 423 euro per hour and was any time line put on his appointment?
I think the public have a right to be fully informed before unfair and unjust hubris is poured on descent people doing a voluntary job in running their credit union, yes I think this is the most important point voluntary effort built up newbridge credit union it now appears that officals from Dublin have come down to put the boot in Please make your voices heard give the members the right and the opportunity to me heard a Special general meeting of Newbridge Credit union Now and get answers to the questions

whitleydonal

later10 wrote: »

Interesting development today at one of Ireland's most roguish credit unions as it emerged that the commercial court has appointed a"special manager" to Newbridge.

The Commission on credit unions last year indicated that 27 credit unions were in serious need of recapitalisation (reserves<7.5%).
http://www.finance.gov.ie/documents/publications/reports/2011/credit.pdf

Interestingly, Newbridge Credit union is open tomorrow, along with most large credit unions. Although all CU deposits up to €100,000 are protected, it will be interesting to see if this incident resonates at all with its members, in Newbridge or elsewhere.

interesting to see by your location that you have voted with your feet similar to Denis O'Brien, and others a bit like shouting instructions on how to swim from the river bank

whitleydonal

credit unions cannot afford tribunal rates of pay

dvpower

whitleydonal wrote: »

interesting to see by your location that you have voted with your feet similar to Denis O'Brien, and others a bit like shouting instructions on how to swim from the river bank

later10 is a tax exile?

Damien360

Willow20 wrote: »

Damien 360
- And I sincerely hope you have solid back up for your statement above on a public forum - stating that "they gave loans to developers ...... Some of these properties are now with NAMA......this is one of the losses they got hit with " How exactly would you have that detailed info - irresponsible loose talk like this is unfair to a local business when you clearly have not got your facts right.
At least be factual and not sensationalizing gossip you heard elsewhere.

That is a statement of fact. It was said by the chairman at the AGM, which I attended, that they gave money to developers but refused to name either the properties or the developer. You hardly think that 38,000 members manged to default on €20 million in one year alone ? I asked specifically about this when I stood up and asked questions of the board at the same AGM. They may have seen this coming as they gave the contract for legal services to the same company without going to tender, even though the bill increased substantially. That was another serious bone of contention with members that night and was brought to light by another legal company director present.

There is a huge cue there this morning. Mostly elderly people.

A search of RTE website would identify the properties in question at langton cross in Newbridge

This is a picture of them

Park Royal

I would presume the €423 per hour is for more than one person.?...

I do hope Newbridge CU have not been making stupid loans to people..?

or putting money into non capital guaranteed investments..???

I always felt there was a greater responsibility to safeguard members

savings , than lending the savings to risky borrowers ......

striving for growth all the time , can lead to a greater tolerance for undue

risk..

CU's provide a great service , many churn millions of euros in

savings in and out as well as loans in and out.....ie ( savings deposits and

savings withdrawals , borrowed loan amounts and repaid loan amounts)

It really is a huge service to communities....( I wish Newbridge well)

Damien360

whitleydonal wrote: »

I would ask you to remember that credit unions were the only institution lending to ordinary joe's for the last three years as the bank were and are still are not working. There are a number of serious questions need to be answered in this case namely

Why was th application made ex-parte to the courts as there was no urgency in the matter this move denied the credit union the right to reply?
(make the matter sub-judice and silence the board)

Why is the board of directors forbidden communicate directly with the members or issue a statement unless it is cleared by the central bank?

Why is the credit union not permitted to hold its AGM or call a special general meeting to give the members the opportunity to be fully informed?

Why is the Special Manager costing 423 euro per hour and was any time line put on his appointment?
I think the public have a right to be fully informed before unfair and unjust hubris is poured on descent people doing a voluntary job in running their credit union, yes I think this is the most important point voluntary effort built up newbridge credit union it now appears that officals from Dublin have come down to put the boot in Please make your voices heard give the members the right and the opportunity to me heard a Special general meeting of Newbridge Credit union Now and get answers to the questions

With the name Whitley it is a safe bet that you are a Newbridge head. You know that there are plently of channels for a local organisation to get info out. The problems would not have arisen if the credit union stuck to it's own lending rules as set down in its charter. If the central bank feels the current board of directors are not suitable (they have'nt changed in years) then a court date with no right of reply may be the only option.Your last 2 sentences referencing the Dublin officials coming down labels that point. They do not wish a kind of South Kerry attitude of the big city folk coming down to sort out the country bumpkins.

Damien360

Park Royal wrote: »

I would presume the €423 per hour is for more than one person.?...

I do hope Newbridge CU have not been making stupid loans to people..?

Not since the bust in 2008 they have'nt

Park Royal wrote: »

or putting money into non capital guaranteed investments..???

This worries me as a lot of money is tied up in the banks and I was not sure from the accounts given if that was cash or bonds/investments

Park Royal wrote: »

I always felt there was a greater responsibility to safeguard members

savings , than lending the savings to risky borrowers ......

striving for growth all the time , can lead to a greater tolerance for undue

risk..

That is their ethos but that was lost during the boom when they loaned silly amounts with the property as security

Damien360

http://www.newbridgecu.ie/content.asp?section=112

I hope the above is true. If it is, what is the central banks concern ?

ressem

If a credit union is going to have a 3 grand a day leech forced onto it's payroll, are the owners of the credit union going to be told what's going on?

A one sided anecdotal view from a board member of a local credit union (other than Newbridge but on the regulator watchlist) mentioned that loan repayments inward are exceeding new loans out at a rate of 3:1 due to the limits imposed by the regulator.

The credit union are told to appoint the regulator's choice of auditor, in addition to their existing firm and pay out of it from credit union funds, but the members and board are not permitted to see the resulting reports.

The credit union aren't permitted by the regulator to hold an AGM to inform the members / owners of the bank what is going on. The members don't get to unelect directors even though their maximum term is up.

And the existing directors are of the opinion that the regulator has in the past forced them to overstate bad debts which have not materialised in the last years, so there will be an overstated profit the next time they are permitted to make public a set of accounts. Which is not a good thing, and auditors should not be allowing this.

And at the same time the disgusting loan sharks are appearing to make headway in the place. Apparently it's better for desperate stupid people at Christmas to borrow at 1000%, than for the government to take on any new risk.
Even though there are two reserves before the government gets hit.

Also the government needs to come out and say who dreamed up this 1 billion in arrears for credit unions and why. It seems to be a number plucked off the top of someone's head, that neither the regulator nor the ICLU have knowledge of.

As for that 250 million regarding the credit unions in last years budget 'to be injected'.
Many credit unions have tonnes of cash that they are not permitted to lend (for Newbridge, looks like €53 million forced into Irish banks by the government regulations). Not permitted to lend to members, nor to business at anything like a sustainable level.
Stuck in lower interest dodgy bloody banks, for 90 day max investments.

So is that 250 million going to be another bank subsidy fed through the credit union, that credit union members are forced to pay for?

-- edit --
I am aware that I may be getting false information, all the more reason to be able to be permitted to see the independent audit reports that we're paying for.

badgerbroc11

ressem wrote: »

If a credit union is going to have a 3 grand a day leech forced onto it's payroll, are the owners of the credit union going to be told what's going on?

So much for salary caps in banks when the regulator can ignore this and appoint a consultant at a rate of €824,850 per annum.

The credit union aren't permitted by the regulator to hold an AGM to inform the members / owners of the bank what is going on. The members don't get to unelect directors even though their maximum term is up.

Reading previous posts, the directors wern't very forthcoming last year themselves!

And the existing directors are of the opinion that the regulator has in the past forced them to overstate bad debts which have not materialised in the last years, so there will be an overstated profit the next time they are permitted to make public a set of accounts. Which is not a good thing, and auditors should not be allowing this.

Agree with you on this, however does anyone other than the directors know the true extent of the problems in NCU. The regulator obviously doesn't believe the directors anymore.

And at the same time the disgusting loan sharks are appearing to make headway in the place. Apparently it's better for desperate stupid people at Christmas to borrow at 1000%, than for the government to take on any new risk.

Loan sharks are rife again and sound prudent credit unions are being restricted

Also the government needs to come out and say who dreamed up this 1 billion in arrears for credit unions and why. It seems to be a number plucked off the top of someone's head, that neither the regulator nor the ICLU have knowledge of.

1Billion which reduced to €250million in the budget and I'd imagine will end up much less when everything is sorted. But the scaremongering can have devasting effects. Because overall the credit unions are strong they themselves will cover these costs without the need of bailouts from europe. The Credit Union model which has is effective is being attacked but politicians are of the regulator and seem unwilling to defend the one this which is working.

whitleydonal

Park Royal wrote: »

I would presume the €423 per hour is for more than one person.?...

I do hope Newbridge CU have not been making stupid loans to people..?

or putting money into non capital guaranteed investments..???

I always felt there was a greater responsibility to safeguard members

savings , than lending the savings to risky borrowers ......

striving for growth all the time , can lead to a greater tolerance for undue

risk..

CU's provide a great service , many churn millions of euros in

savings in and out as well as loans in and out.....ie ( savings deposits and

savings withdrawals , borrowed loan amounts and repaid loan amounts)

It really is a huge service to communities....( I wish Newbridge well)

The 439 euro is for one person the manager assistants are to be paid between 15 to 430 per hour it seems that the appointment of the office is just a legal term the whole thing is a disgrace no doubt at this cost the must be worth it, this is coming from the same people who made such a good job of supervising the banks

Damien360

whitleydonal wrote: »

The 439 euro is for one person the manager assistants are to be paid between 15 to 430 per hour it seems that the appointment of the office is just a legal term the whole thing is a disgrace no doubt at this cost the must be worth it, this is coming from the same people who made such a good job of supervising the banks

Rates of pay like that are normally reserved for directors of large publicly quoted companies. They tell the shareholders that they should be paid this as they could loose their job in a flash as they are solely responsible for any issues that effect earnings and thereby the share price. Is this special manager responsible/accountable in any way ? That rate of pay is unforgiveable.

whitleydonal

ressem wrote: »

If a credit union is going to have a 3 grand a day leech forced onto it's payroll, are the owners of the credit union going to be told what's going on?

A one sided anecdotal view from a board member of a local credit union (other than Newbridge but on the regulator watchlist) mentioned that loan repayments inward are exceeding new loans out at a rate of 3:1 due to the limits imposed by the regulator.

The credit union are told to appoint the regulator's choice of auditor, in addition to their existing firm and pay out of it from credit union funds, but the members and board are not permitted to see the resulting reports.

The credit union aren't permitted by the regulator to hold an AGM to inform the members / owners of the bank what is going on. The members don't get to unelect directors even though their maximum term is up.

And the existing directors are of the opinion that the regulator has in the past forced them to overstate bad debts which have not materialised in the last years, so there will be an overstated profit the next time they are permitted to make public a set of accounts. Which is not a good thing, and auditors should not be allowing this.

And at the same time the disgusting loan sharks are appearing to make headway in the place. Apparently it's better for desperate stupid people at Christmas to borrow at 1000%, than for the government to take on any new risk.
Even though there are two reserves before the government gets hit.

Also the government needs to come out and say who dreamed up this 1 billion in arrears for credit unions and why. It seems to be a number plucked off the top of someone's head, that neither the regulator nor the ICLU have knowledge of.

As for that 250 million regarding the credit unions in last years budget 'to be injected'.
Many credit unions have tonnes of cash that they are not permitted to lend (for Newbridge, looks like €53 million forced into Irish banks by the government regulations). Not permitted to lend to members, nor to business at anything like a sustainable level.
Stuck in lower interest dodgy bloody banks, for 90 day max investments.

So is that 250 million going to be another bank subsidy fed through the credit union, that credit union members are forced to pay for?

-- edit --
I am aware that I may be getting false information, all the more reason to be able to be permitted to see the independent audit reports that we're paying for.

Thank you for your comments I am a director of a credit union for over 20 years, you are spot on with most of your comments our credit union for instance has liquidity of 62% reserves of 18% a dividend reserve that we were no allowed distribute to the members of 7 million a provision for bad and doubtful debts of 23%. We are currently restricted in how much we can lend we are not allowed to put money on deposit for longer than 3 months. we are not allowed to buy government bonds the central bank must know something we dont. the central bank agenda appears to be to destroy the credit unions and force people back to the money lenders. we are not allowed to take restructured loans from MABS without taking a full impairment for such loans as a result we no longer deal with MAB cases. I remember that the figure required for credit unions off the tom of someones head was 1 billion that was revised downwards to 500 million now you tell me its 250 million
i would have full confidence in this process if the mandrins from the central bank were not involved please please please can we have transparency around this whole process the bank todate have gagged credit union boards bullied auditors and freightened members for no reason. The members need to employ their own independent experts to expose this farcs and power play by the central bank

uberwolf

Damien360 wrote: »

Rates of pay like that are normally reserved for directors of large publicly quoted companies. They tell the shareholders that they should be paid this as they could loose their job in a flash as they are solely responsible for any issues that effect earnings and thereby the share price. Is this special manager responsible/accountable in any way ? That rate of pay is unforgiveable.

the majority of senior partners in legal firms charge at that hourly rate and much more. It doesn't necessarily equate to money into his/her back pocked.

whitleydonal

uberwolf wrote: »

the majority of senior partners in legal firms charge at that hourly rate and much more. It doesn't necessarily equate to money into his/her back pocked.

yes but it is money coming out of the pocket of credit union members

whitleydonal

Damien360 wrote: »

With the name Whitley it is a safe bet that you are a Newbridge head. You know that there are plently of channels for a local organisation to get info out. The problems would not have arisen if the credit union stuck to it's own lending rules as set down in its charter. If the central bank feels the current board of directors are not suitable (they have'nt changed in years) then a court date with no right of reply may be the only option.Your last 2 sentences referencing the Dublin officials coming down labels that point. They do not wish a kind of South Kerry attitude of the big city folk coming down to sort out the country bumpkins.

No I am a dub did you not notice that the banks are cured I hope the central bank will not give the credit unions the same medicine

ressem

badgerbroc11 wrote: »

Agree with you on this, however does anyone other than the directors know the true extent of the problems in NCU. The regulator obviously doesn't believe the directors anymore.

It was audited during the year by the regulator appointed auditors.
It's the manager who is there every day who is being sidestepped.

There's a post I saw on another site suggesting that the regulator went to the high court at 4pm for permission to appoint a manager, and only then approached Ernst and Young.
(http://www.independent.ie/national-news/central-bank-takes-over-running-of-thirdlargest-credit-union-in-state-2988848.html)

And that this move was as a response to a bank rush because a of caller to a local radio station making claims.
Can anyone local verify that?

The Credit Union model which has is effective is being attacked but politicians are of the regulator and seem unwilling to defend the one this which is working.

They are providing rumour and speculation with fertiliser instead of releasing the actual information that is in their possession, through the independent audits by the regulator's appointed auditors that were reported as nearly complete in January 2011.

We get filleted snippits such as the interim annual report 2011
http://www.finance.gov.ie/documents/publications/reports/2011/credit.pdf

Then the newspapers go off with this and in the same week claim that anywhere from 29 - 79 credit unions are in difficulties.

The same report says

3.6 Loan-to-asset ratios
3.6.1 In Table 6 the loan-to-asset ratio is documented. On this count Irish
credit unions appear to be significantly under-lent. During this period,
the loan-to-asset ratio for the sector rose from 47.45% in 2006 to
52.11% in 2008. However, since 2008 this ratio has contracted quite
quickly to 47.63% in 2009 and then to 42.45% in 2011.

If the credit union was one institution, then there would be little issue.
Earning Interest on loans to members at €546.47m, investment income €207.76m. Loans that had to be written off €107.44m in 2010, less than 2% of loans.

The biggest reason for the change in cost-to-income ratio is the skyrocketing provision for bad debts as the regulator changed the rules for minimum reserve requirements; amount that has been set aside from €269.54m in '08 to €738.41m in 2011.

So am I reading it right that it would take 7 years of the same level of bad debts writeoffs, and zero new provision made, to chew up the reserves?

What's the extra government 250 million going to do?

And as for the super-manager

5.1.3 The safe and sound operation of each credit union is the responsibility of its democratically elected officials and management. All credit unions should be required to have robust governance arrangements.
In particular, there should be a clear organisational structure with well
defined, transparent and consistent lines of responsibility

I think the regulator has botched this recommendation. Who is this manager meant to be accountable to?

And an Ernst and Young manager too. The auditors with "a case to answer" for Anglo.
http://www.irishtimes.com/newspaper/finance/2011/0915/1224304142170.html

whitleydonal

ressem wrote: »

It was audited during the year by the regulator appointed auditors.
It's the manager who is there every day who is being sidestepped.

There's a post I saw on another site suggesting that the regulator went to the high court at 4pm for permission to appoint a manager, and only then approached Ernst and Young.
(http://www.independent.ie/national-news/central-bank-takes-over-running-of-thirdlargest-credit-union-in-state-2988848.html)

And that this move was as a response to a bank rush because a of caller to a local radio station making claims.
Can anyone local verify that?



They are providing rumour and speculation with fertiliser instead of releasing the actual information that is in their possession, through the independent audits by the regulator's appointed auditors that were reported as nearly complete in January 2011.

We get filleted snippits such as the interim annual report 2011
http://www.finance.gov.ie/documents/publications/reports/2011/credit.pdf

Then the newspapers go off with this and in the same week claim that anywhere from 29 - 79 credit unions are in difficulties.

The same report says


If the credit union was one institution, then there would be little issue.
Earning Interest on loans to members at €546.47m, investment income €207.76m. Loans that had to be written off €107.44m in 2010, less than 2% of loans.

The biggest reason for the change in cost-to-income ratio is the skyrocketing provision for bad debts as the regulator changed the rules for minimum reserve requirements; amount that has been set aside from €269.54m in '08 to €738.41m in 2011.

So am I reading it right that it would take 7 years of the same level of bad debts writeoffs, and zero new provision made, to chew up the reserves?

What's the extra government 250 million going to do?

And as for the super-manager


I think the regulator has botched this recommendation. Who is this manager meant to be accountable to?

And an Ernst and Young manager too. The auditors with "a case to answer" for Anglo.
http://www.irishtimes.com/newspaper/finance/2011/0915/1224304142170.html

let the credit union publish their annual accounts that are available complete and signed off by the indpendent auditor to the members publish the truth now

whitleydonal

I am perplexed at the appointment of a special manager to Newbridge credit union with a click of the fingers an investigation can be ordered yet the central bank refuses to discuss why it will not release the confidential report into wrongdoing by Davy Stockbrokers in selling bonds to credit unions. I have attached the Stock exchange statement released at the time. This statement was released the day after the delivery of a budget by the Minister for Finance. No one will explain why this matter was covered up.

the central bank accuses credit unions of making inappropriate investments on one hand and refuses to publish a report that is clearly in the credit union and public interest on the other.

this report was known about when the Financial Services Ombudsman was in the high court on the very same matter but the inner circle still operates, we changed the Financial Regulator but the changes did not go far enough. please read the attached and form your own opinion. Davy refused to give permission for the publication of the report the wrong doer had a veto

Willow20

whitleydonal wrote: »

I am perplexed at the appointment of a special manager to Newbridge credit union with a click of the fingers an investigation can be ordered yet the central bank refuses to discuss why it will not release the confidential report into wrongdoing by Davy Stockbrokers in selling bonds to credit unions. I have attached the Stock exchange statement released at the time. This statement was released the day after the delivery of a budget by the Minister for Finance. No one will explain why this matter was covered up.

the central bank accuses credit unions of making inappropriate investments on one hand and refuses to publish a report that is clearly in the credit union and public interest on the other.

this report was known about when the Financial Services Ombudsman was in the high court on the very same matter but the inner circle still operates, we changed the Financial Regulator but the changes did not go far enough. please read the attached and form your own opinion. Davy refused to give permission for the publication of the report the wrong doer had a veto

Very good link and content Donal - I completely agree with you .
there are bully boy tactics, and backside covering behaviours being used here on credit unions - also, if this was such an "urgent" issue that they had to go to court etc rtc why did this not surface in the MANY audits (The regulators ever popular close friends ) Grant Thornton ( who were forced on them) did - including the fact that the final audited accounts as i have been told have been with the regulator since October last year, so why come up with this carry on now - a whole 4 months later.
Mr. elderfield just wants to be seen cracking his money grabbing whip! He is Suceeding in getting the taxpayer to put there money back in to the banks that we are already paying for as a result of imbeciles in this country!

amen

I am a director of a credit union for over 20 years

And I am sure you have been a very good and diligent director but 20 years is too long for anyone to be director.

Willow20

amen wrote: »

I am a director of a credit union for over 20 years

And I am sure you have been a very good and diligent director but 20 years is too long for anyone to be director.

Amen - I must disagree, 20 years experience is invaluable now days - you wouldn't say that to someone who had their own business for 20yrs ? Oh it's time to give that up now your too long at it, bring in someone with little experience they will be better ! It requires a mixture of experience and new blood.
On a different note - Martin heydon td - is a total idiot for making that irresponsible statement today about it being too early to tell if it will close - the Special Manager told the members the plan is to keep it open and make it stronger!!! Idiot td's !!!!!!

AlekSmart

whitleydonal wrote: »

Thank you for your comments I am a director of a credit union for over 20 years, you are spot on with most of your comments our credit union for instance has liquidity of 62% reserves of 18% a dividend reserve that we were no allowed distribute to the members of 7 million a provision for bad and doubtful debts of 23%. We are currently restricted in how much we can lend we are not allowed to put money on deposit for longer than 3 months. we are not allowed to buy government bonds the central bank must know something we dont. the central bank agenda appears to be to destroy the credit unions and force people back to the money lenders. we are not allowed to take restructured loans from MABS without taking a full impairment for such loans as a result we no longer deal with MAB cases. I remember that the figure required for credit unions off the tom of someones head was 1 billion that was revised downwards to 500 million now you tell me its 250 million
i would have full confidence in this process if the mandrins from the central bank were not involved please please please can we have transparency around this whole process the bank todate have gagged credit union boards bullied auditors and freightened members for no reason. The members need to employ their own independent experts to expose this farcs and power play by the central bank

Those are some very pertinent issues Whitleydonal,and are deserving of some equally pertinent replies from all involved,right up to the Minister for Finance.

The Newbridge CU incident appears to be the chosen first-battle site for the Central Bank's NEW !! IMPROVED !! regulatory mechanisms.

However,I see the current Newbridge machinations as yet more reasoning for a FULL revelation of the events of October 2008 and the Irish Banking Industry's house call to Minister Lenihan.

I am confident that Brian Lenihan and an ill-prepared group of semi-competent Senior Civil Servants were ambushed by a well briefed,well motivated,confident group of Bankers and Advisers,who remain most keen to maintain their anonymity.....Until this secret confessional seal is broken then ALL current Irish Government fiscal policy remains highly suspect.

whitleydonal

Willow20 wrote: »

Amen - I must disagree, 20 years experience is invaluable now days - you wouldn't say that to someone who had their own business for 20yrs ? Oh it's time to give that up now your too long at it, bring in someone with little experience they will be better ! It requires a mixture of experience and new blood.
On a different note - Martin heydon td - is a total idiot for making that irresponsible statement today about it being too early to tell if it will close - the Special Manager told the members the plan is to keep it open and make it stronger!!! Idiot td's !!!!!!

Thanks for your comments I will be leaving the credit union board this year not because I am there too long and I do agree it is too long, but because the central bank has destroyed the ethos it is a sad day when I am no longer in a position to help my neighbour suddenly the focus of the regulator turns to credit unions. I would ask everyone to picture Ireland without credit unions for the last three years with the banks not lending and especially to little folk or the unemployed.

The media do not understand credit unions when you hear Newbridge cu referred to as a branch, when in fact it owned and run by the members. I am sure a well paid board would make a fine job of things, credit union members need to rise up and protect their credit unions in their own interests. I notice in the Newbridge dilema everyone seems to be talking over the members instead of at them. There needs to be a general meeting of the credit union to discuss the report of the special manager I bet that report will be confidential and will never see the light of day. please agitate agitate I agree that TD who appears to know nothing about the matter should keep his mouth shut. it interesting that the media spin is that the credit union has failed to hold its agm I know that you must now get the permission of James O'Brien to hold your AGM and it can take anything up to a month to get a reply I am disappointed that no one questions the motives of the regulator here other than he is protecting the savings of the members.

Ordinary folk started credit unions in the late fifties because at that time you were no welcome in the banks, money lenders, legal and illegal ruled working class areas. Credit unions started in schools with people entrusting their savings to their neighbours there was a lot of people said it would never work but today without grant aid or political boot licking it grew into the success it is today. The credit unions have kept this country going when the banks failed us and in a year where the state borrowed 10 billion half the states borrowing requirement to keep them going and are about to pay the loosing bets of anglo irish Bond holders. credit unions have not cost the state a penny. Since the ethos and heart is leaving the credit union movement so am I but I will remain proud to my dying day of all the selfless men and women who have volunteered so much of their valuable spare time to build their community and when all is said and done voluntary effort has not done a bad job.

whitleydonal

Willow20 wrote: »

Amen - I must disagree, 20 years experience is invaluable now days - you wouldn't say that to someone who had their own business for 20yrs ? Oh it's time to give that up now your too long at it, bring in someone with little experience they will be better ! It requires a mixture of experience and new blood.
On a different note - Martin heydon td - is a total idiot for making that irresponsible statement today about it being too early to tell if it will close - the Special Manager told the members the plan is to keep it open and make it stronger!!! Idiot td's !!!!!!

Thanks for your comments I will be leaving the credit union board this year not because I am there too long and I do agree it is too long, but because the central bank has destroyed the ethos it is a sad day when I am no longer in a position to help my neighbour suddenly the focus of the regulator turns to credit unions. I would ask everyone to picture Ireland without credit unions for the last three years with the banks not lending and especially to little folk or the unemployed.

The media do not understand credit unions when you hear Newbridge cu referred to as a branch, when in fact it owned and run by the members. I am sure a well paid board would make a fine job of things, credit union members need to rise up and protect their credit unions in their own interests. I notice in the Newbridge dilema everyone seems to be talking over the members instead of at them. There needs to be a general meeting of the credit union to discuss the report of the special manager I bet that report will be confidential and will never see the light of day. please agitate agitate I agree that TD who appears to know nothing about the matter should keep his mouth shut. it interesting that the media spin is that the credit union has failed to hold its agm I know that you must now get the permission of James O'Brien to hold your AGM and it can take anything up to a month to get a reply I am disappointed that no one questions the motives of the regulator here other than he is protecting the savings of the members.

Ordinary folk started credit unions in the late fifties because at that time you were no welcome in the banks, money lenders, legal and illegal ruled working class areas. Credit unions started in schools with people entrusting their savings to their neighbours there was a lot of people said it would never work but today without grant aid or political boot licking it grew into the success it is today. The credit unions have kept this country going when the banks failed us and in a year where the state borrowed 10 billion half the states borrowing requirement to keep them going and are about to pay the loosing bets of anglo irish Bond holders. credit unions have not cost the state a penny. Since the ethos and heart is leaving the credit union movement so am I but I will remain proud to my dying day of all the selfless men and women who have volunteered so much of their valuable spare time to build their community and when all is said and done voluntary effort has not done a bad job.

bbability

Just to clarify the board of directors of any credit union is unable to call an AGM without the regulator approving the accounts for the previous 12 months. For example if your local credit union is in good condition and is meeting all the regulators requirements and the board propose a dividend, it must be approved by the regulator before the AGM can be finalised.

From what I can see Newbridge have a problem with their reserves. That to me did not happen overnight. The regulator was quite clear to CU's last year to reviews all loan books and ensure reserves were at correct level and to get house in order or they would step in.
In my opinion Newbridge will get through this as long as it's members don't panic. They don't need to. They do have a right to question the people who they voted to represent them and make sure when the regulator is ready to hand back the reigns that qualified/experienced and pro credit union financial people are elected to the board. This is another requirement by the regulator that all board members have completed some sort of training pertaining to financial regulations/corporate governance.

All I can say finally is I hope and pray that NCU get sorted quickly and the people/members get behind their credit union and appoint the right people to guide them forward. On another note they are not members of the League of Credit Unions but are members of CUDA who in my opinion are pressing forward with changes to the future of the Credit Union movement in Ireland.

whitleydonal

bbability wrote: »

Just to clarify the board of directors of any credit union is unable to call an AGM without the regulator approving the accounts for the previous 12 months. For example if your local credit union is in good condition and is meeting all the regulators requirements and the board propose a dividend, it must be approved by the regulator before the AGM can be finalised.

From what I can see Newbridge have a problem with their reserves. That to me did not happen overnight. The regulator was quite clear to CU's last year to reviews all loan books and ensure reserves were at correct level and to get house in order or they would step in.
In my opinion Newbridge will get through this as long as it's members don't panic. They don't need to. They do have a right to question the people who they voted to represent them and make sure when the regulator is ready to hand back the reigns that qualified/experienced and pro credit union financial people are elected to the board. This is another requirement by the regulator that all board members have completed some sort of training pertaining to financial regulations/corporate governance.

All I can say finally is I hope and pray that NCU get sorted quickly and the people/members get behind their credit union and appoint the right people to guide them forward. On another note they are not members of the League of Credit Unions but are members of CUDA who in my opinion are pressing forward with changes to the future of the Credit Union movement in Ireland.

Hi yes every credit union must have the permission of the regulator to hold their agm or any general meeting.
I am on the board of a credit union with liquidity of 58% requirement 25% reserves of 17% requirement 10% and dividend reserve not allowed to be given to the members of 7 million and in spite of these numbers we are not allowed to invest beyond three months deposit and our lending is restricted and we are not a small credit union 200 million plus.

earnst & young were auditors to Anglo but it would appear that their cv is good enough for newbridge.

Grant thornton are the auditors of choice imposed by the regulator. I have a significant problem with a regulator who insists in using the total loan book figure to calculate a credit unions loan exposure. A member of a credit union pledges their shares as security and under the law may not be withdrawn when there is a loan outstanding yet the regulator insists in using the gross loan figure which has the result of making the position look worse than it actually is.

when you make bad debt provision it must be on the total loan.


our loan book is gross 67 million but when the share are deducted the net position is 41 million our bad and doubful debt provision is 5.1 million against a write off of 2,1 million. I would be more impressed if the central bank conducted its own investigation and stood over its own findings its chicken to hide behing earnst & young and when the bank refers to newbridge cu it will be the earnst & young report this and that. THE CREDIT UNIONS LATE LAST YEAR WERE GOING TO NEED ONE BILLION THEN IT WAS 500 NOW ITS 250 its not an exact sicence patrick Neary springs to mind.It is the small credit unions that will fail there are far too many credit unions in ireland, with a large amount of regulation compliance requirement and minimum competency requirements small credit unions are finished. newbridge appears to have wanted to pay a dividend the regulator appears to have insisted on one of two things a demand to meet the 10% reserve requirement immediately or more than likely make a bigger provision for bad and doubtful debts, the board apperar to have had a showdown and the regulator decided to take them out of the equation,
the members of newbridge deserve their AGm and this should take place as soon as possible and the registrar of Credit Unions should go along address the members and answer questions is that too much to ask, Above ALL the process should be transparent

Willow20

I heard today from a very good source that there was a showdown of sorts between Newbridge board and the regulator / they had reserves of well over 10% at there year end in September 2011, but when their (forced upon them) auditors grant tharnton got a hold of the account they had them for ages and then changed parts around leaving them under the 10%! what type of auditor are they that they purposefully brought them down and took months to do it - what hope do other Cu have if they get grant Thornton forced on them too.

GerardKeating

SPDUB wrote: »

According to the RTE 8am news the "Special Manager" is being paid his hourly rate even though he's being appointed for an indefinite period .

Nice to know the Central bank tried to get value for money :rolleyes::rolleyes:

Is it an "indefinite period, in the letter he sent to members he states his appointment is for a period of six months.

bbability

Has there been any interviews on TV or radio regarding this matter?

Just to note the board are not entitled to call an AGM without approval of regulator. They should have called an EGM mind you...

whitleydonal

bbability wrote: »

Has there been any interviews on TV or radio regarding this matter?

Just to note the board are not entitled to call an AGM without approval of regulator. They should have called an EGM mind you...

The elected board of directors are voiceless as all their power is vested in the Special manager The mambers cannot get a general meeting of any kind the whole thing is a disgrace The members are entitled to a general meeting and to be given answers. Newbridge credit union is in administration and may be wound up in spite of what the letter to the members says. it is a process that is going to cost the members of the credit union at least one million euro and you are not guaranteed any answers. The members need to take to the streets and demand answers

Damien360

Can someone explain these figures to me. I am struggling to find the 29% liquidity rate.

taken form here : http://www.newbridgecu.ie/content.asp?section=112

Also what could have changed for the rate to be calculated as below 10% bringing in the central bank.



Nett assets are 210m total assets less the bad provison of 20m giving 190m. I cannot understand why a loan book of 140m is included as an asset but I assume that is accounting.

Total assets of 210m equals cash 53m, fixed assets 17m (I hope this is not the accounting value of the big building they are in) and loan book of 140m.

Total liabilities 164m equals total assets 210 less reserves 26m and less bad debt provision 20m.

Solvency rate 190m assets divided by liabilities of 164m equal 113%. But the loan book is used as part of this calculation in assets and liabilities.

I am not an accountant so maybe I am reading too much in to this. can someone please explain the figures and offer a reasonable explanation as to what way the calculation changed to change liquidity rate as willow20 alluded to.

Geuze

Loans are the main assets of all credit unions or banks.

ressem

Damien360 wrote: »

Can someone explain these figures to me. I am struggling to find the 29% liquidity rate.

Also what could have changed for the rate to be calculated as below 10% bringing in the central bank.

The reserves need to be over 10%.

Damien360 wrote: »

Nett assets are 210m total assets less the bad provison of 20m giving 190m. I cannot understand why a loan book of 140m is included as an asset but I assume that is accounting.

From a lenders point of view, the loan book is money the union is scheduled to receive. Interest on these loans makes up the majority of income.

Damien360 wrote: »

Total assets of 210m equals cash 53m, fixed assets 17m (I hope this is not the accounting value of the big building they are in) and loan book of 140m.

Total liabilities 164m equals total assets 210 less reserves 26m and less bad debt provision 20m.

Solvency rate 190m assets divided by liabilities of 164m equal 113%. But the loan book is used as part of this calculation in assets and liabilities.

I am not an accountant so maybe I am reading too much in to this. can someone please explain the figures and offer a reasonable explanation as to what way the calculation changed to change liquidity rate as willow20 alluded to.

The liquidity rate measures current assets (money held in investments that can be got hold of very quickly) against current liabilities (mostly the deposits of credit union members who could choose to withdraw the money any morning)

If there was a panic of members withdrawing savings that approaches the 29% the credit union would not be able to pay out the members savings until the next batch of income came in.

Damien360

Geuze wrote: »

Loans are the main assets of all credit unions or banks.

Fair enough but then the question is how much more bad debt provision had to be supplied this year to allow the liquidity rate fall below 29% from 2011.

How much of the 140m can be considered realistic to recover. Anyone have the current default rate on loans in Ireland. I looked at central bank statistics but cannot seem to find the figure. I do not have excel on this PC to view sheets but not sure I have the correct page.

http://www.centralbank.ie/polstats/stats/cmab/Pages/releases.aspx

Damien360

ressem wrote: »

The reserves need to be over 10%.

.

So therefore reserves of 26m divided by liabilities of 164m = 15% ???

I huge jump in bad debt provision can be the only thing that effected the reserve rate. Not sure if there was a capital flight before the central bank walked in.

whitleydonal

The central bank is insisting on huge provisions for bad and doubtful debts in a lot of cases this requirement is in excess of the prudential requirement. The provision takes no account of the net loan figure. A members share are held as security against the loan. The bad debt position is overstated by the central bank. There are over 400 credit unions that have taken ordinary people through the worst recession since the second world war. I am at a loss to understand that after three years since the banks closed their doors the central bank turns its attention to credit unions. Minister Noonan started out with a figure of 1 billion to bailout the credit unions that after a few weeks this fell to 500 million then in the budget it is 250 million, Please bring in the people who finally stress tested the banks properly it appears taht the central bank does not have a clue
Credit unions have driven money lenders out of communities it appaers that they will be making a return with the assistance of the central bank.

BornToKill

whitleydonal wrote: »

The provision takes no account of the net loan figure. A members share are held as security against the loan. The bad debt position is overstated by the central bank.

That's fair enough but what would be the worth of members' shares held as security where a credit union is insolvent? I'm asking the question in general terms and am not suggesting that any given credit union is in this situation.

whitleydonal

BornToKill wrote: »

That's fair enough but what would be the worth of members' shares held as security where a credit union is insolvent? I'm asking the question in general terms and am not suggesting that any given credit union is in this situation.

There is no evdience that any credit union is insolvent the main problem with bank lending was that they did not know their customers more interested in quick profits. All credit union members are held by a common bond employer or parish generally. The vast majority of credit union members are individual hard working and honest. I would consider the crediit union is for most people their only hope as the next stop is a money lender. it is my experience that members are loyal to their credit union. the only request I make is that the actions of the central bank are transparent and accountable because I know when questions are asked the answers will be held secret and cloaked in Confidentiality and secrecy

BornToKill

whitleydonal wrote: »

There is no evdience that any credit union is insolvent the main problem with bank lending was that they did not know their customers more interested in quick profits. All credit union members are held by a common bond employer or parish generally. The vast majority of credit union members are individual hard working and honest. I would consider the crediit union is for most people their only hope as the next stop is a money lender. it is my experience that members are loyal to their credit union. the only request I make is that the actions of the central bank are transparent and accountable because I know when questions are asked the answers will be held secret and cloaked in Confidentiality and secrecy

That does not answer the question I asked at all.

whitleydonal

BornToKill wrote: »

That does not answer the question I asked at all.

A credit union or any business is insolvent when it cannot pay its bills as they fall due. Your question is really how long is a piece of string when a credit union becomes insolvent it may very well cease to trade or wind up. In winding up all the assets reserves costs and liabilities are realised and to answer your question the members may get anything from zero to a percentage of their shareholding following this exercise after examinership. In that event the state guarantee on which there has been no call on it yet even in the banks, would step in and pay the shareholders up to par. This is where your security will be realised against your loan for instance if you had shares of 5000 and a loan of 10000 your shares would be netted off and your revised liability would be 5000. All credit unions are obliged to hold a reserve with the central bank

bbability

The old rule was and still is in most cases you must have a certain amount of shares to borrow a certain amount of money. 3:1 was the rule of thumb for most CU'S around the country. Far be it from me to say what a credit union is lending out but it most certainly should not be lending money to people who have very little in shares. If the banks had been regulated like this in the past we wouldn't be having this conversation.
I believe that the reserve required by the regulator is adequate. This weekends CUDA AGM will be interesting. I wonder if Newbridge can attend in their current position.

whitleydonal

bbability wrote: »

The old rule was and still is in most cases you must have a certain amount of shares to borrow a certain amount of money. 3:1 was the rule of thumb for most CU'S around the country. Far be it from me to say what a credit union is lending out but it most certainly should not be lending money to people who have very little in shares. If the banks had been regulated like this in the past we wouldn't be having this conversation.
I believe that the reserve required by the regulator is adequate. This weekends CUDA AGM will be interesting. I wonder if Newbridge can attend in their current position.

There is no argument that reserves need to be adequate but it is the other reserves that the regulator is pushing the bad and doubtful reserve for instance where in some credit unions it is 200% 0f what is required under resolution 49.
A number of directors from Newbridge credit union will be attending the CUDA AGM but the special manager has made it clear that l do so in a personal capacity at their own expense and do not represent Newbridge credit Union