THE CENTRAL BANK has denied that it is imposing an unnecessary merger on the members of Newbridge Credit Union, insisting that the plan to combine the institution with its neighbour in Naas is the only way to save it.

A spokesperson for the Central Bank also revealed that the takeover by Naas, which has assets in the region of €70 million, of Newbridge, whose last assets were valued at over €160 million, will cost the taxpayer “tens of millions of euro”.

The funding will come from the Credit Institutions Resolution Fund, with the Central Bank insisting that the merger is the only viable future for Newbridge Credit Union. Finance Minister Michael Noonan, who has approved the merger in principle, set aside €500 million for Credit Union recapitalisation last year. The fund is aimed at helping struggling credit unions merge with stronger ones.

Newbridge Credit Union, which has 37,000 members in the Newbridge, Caragh, Allen, Suncroft and Two-Mile-House parishes, has been operating under a High Court-appointed Special Manager since January 2012.

The initial High Court application was granted for a period of six months, but has been extended three times, most recently in July this year.

‘We are totally opposed to this merger”

There has been strong reaction to the plan from Newbridge, as locals plan to protest at the Central Bank in Dublin on Friday.

Last week, hundreds of members gathered in Ryston Sports and Social Club to oppose the move and members began to withdraw money in droves, putting “serious pressure” on staff.

That run on deposits has since calmed and money is beginning to flow back into accounts, says the chairman of Newbridge Credit Union Action Group Willie Crowley.

“We are totally opposed to the merger. We are a much larger credit union than Naas and a much more stable credit union than Naas.”

Crowley believes that the Central Bank is paying Naas to take on Newbridge as part of a strategy to close credit unions across the country. The action group are also worried that no accounts have been released from Newbridge in over two years, nor has an AGM been held. Legal requirement to withhold meetings and accounts can be suspended under the Special Management Order.

“The truth is, Naas CU is being paid to take us on. If there is now a shortfall in Newbridge CU it is because members, scared stiff of the merger, the bad publicity and getting no dividend for two years have removed their savings.

“Each member of the Board of Newbridge Credit Union, is honest, and hardworking.

“They have given many years of loyal service to the organisation. Each of them has friends and family who are members. To imagine they would do anything to tarnish the reputation of NCU is unthinkable.

“The Central Bank is trying to reduce the number of credit unions down to 52. That’s the plan.”

A Central Bank spokesperson, however, dismissed that assertion out of hand.

“That is pure speculation. The Central Bank is fully supportive of the credit union sector. Newbridge Credit Union cannot operate on a day-to-day basis. We examined a number of plans, but this was the only one we are pursuing.

“To date, there has been 15 mergers in the sector and most have been voluntary.”

The spokesperson added that it was “too early to say” what would happen regarding jobs, boards and operating procedures at the two credit unions.