DUBLIN, Ireland–A tradition at many credit unions in this country, the annual general meeting will not be able to be held prior to Christmas, according to regulators.
The decision also means a delay in the payment of dividends to members—but there is a silver lining as one accounting change could mean larger payouts.
The delay is the result to changes to accounting standards that has created a backlog at Ireland’s Central Bank, which reviews the annual accounts of the lenders, according to The Independent.
Credit unions In Ireland traditionally hold annual general meetings in December to get members to approve the accounts, and agree on a dividend payment. Some three-million people are members of the 315 credit unions across the country.
The Independent reported the delay is due to the application of accounting standard FRS102a, which means credit unions have to make what one auditor called "unprecedented changes" to how they report their financial accounts.
The new standard also requires credit unions to restate accounts for 2014 and 2105, according to the Central Bank.
“Draft audited accounts have to be filed to the registrar in the Central Bank, with a huge backlog of accounts understood to be awaiting approval from regulators,” the Independent reported. “And in a reversal of policies previously recommended by the Central Bank, credit unions that had built up large bad-debt provisions will have to reverse these. However, the release of some funds put aside for bad debts could mean higher dividend payments will be paid out by credit unions this year.”
The Independent quoted one auditor of credit unions as saying it used to take the Central Bank two days to review accounts; it is now taking weeks.
“A delayed AGM is often a sign that a credit union is in a financially distressed state, as regulators don't allow an institution with financial problems to hold its annual meeting,” The Independent noted. “The delays have meant some credit union members have mistakenly assumed their community lender is in trouble.”