DUBLIN, Ireland–Ireland’s credit union regulator is in the process of liquidating a credit union that was described in one report as the “worst financial crisis” in the country.
Numerous questions remain related to what happened at Rush Credit Union here, with the credit union itself in the weeks leading up to the liquidation contacting members to confirm loan and deposit balances.
Among the big questions here is what has become of a missing €700,000 or more, as well as whether a drawing for a vehicle giveaway was rigged in favor of a CU employee being selected as the winner. The controversy also led to the resignation as acting chairman of Gerry Foley, well known to many in the international credit union community and who has been active in the World Council, including as its chairman. Foley has not been implicated in any wrongdoing.
Prior to the liquidation, some analysts were estimating it might have cost as much as €5 million to stabilize the credit union, the Independent reported. The Central Bank has issued a statement stressing there is no risk to any of the savings of the 10,000 members of Rush Credit Union. Members have approximately €25 million in savings at the credit union.
According to the Independent, a probe has found:
- A credit union safe was used to store hundreds of thousands of euro in cash, which was not recorded in the lenders' accounts. “The suspicion is this cash was being hidden from (tax authorities). Because they were attempting to evade tax, the owners have been slow to claim it,” the Independent reported.
- A large number of unverifiable accounts have been discovered.
- According to the Independent, deeds to foreign-based properties were found in the credit union safe. It is not known if they were held as security against loans, or were bought by someone associated with the credit union with money that has gone missing, the Independent said.
In September, the Central Bank obtained a High Court order extending the suspension of credit union manager, Anne Butterly, from holding a management position in a financial services firm. Butterly was originally suspended in June. No one has been charged in relation to the irregularities at the credit union.
The Herald reported that a portion of the probe taking place involves an annual drawing held by the credit union.
“Fears that it was rigged meant that €400,000 had to be refunded, with everyone who entered the draw entitled to have their money put back into their account,” the Herald reported. “The money was refunded for the draws between 2009 and 2014. It is understood that a staff member won the car in at least one draw, but detail of what car was won or in what year were not clear.”
The Herald reported that the investigations, including a Grant Thornton review, have found that the amount missing could be as much as €1.5 million.
The Herald reported that earlier investigators had uncovered evidence that fake loans had been created, while in other cases there are no records of some deposits taken from members. As a result, Rush Credit Union has been asking members to confirm their loan and savings balances.
"It will cost millions of euro to sort this out. It is a basket case, the worst credit union in the country at the moment," The Independent quoted one person familiar with the probe as saying.