Commission extends credit union winding up scheme

Process aimed at safeguarding financial stability in event of difficulties

The scheme allows the State to provide aid for transferring the assets and liabilities of a failing credit union to an acquirer. Photograph: Collins

The scheme allows the State to provide aid for transferring the assets and liabilities of a failing credit union to an acquirer. Photograph: Collins

 

The European Commission has reauthorised until May 2018 the extension of the Irish scheme for the orderly winding-up of credit unions. The commission’s competition directorate confirmed that the scheme is in conformity with EU state aid rules and in particular with its guidelines aid to banks during the crisis.

The purpose of the scheme is to safeguard financial stability when a credit union becomes unable to meet regulatory requirements. It allows the State to provide aid for transferring the assets and liabilities of a failing credit union to an acquirer through a competitive process.

Minimum value

This will help to achieve the maximum value for the assets and liabilities, ensuring that the aid is limited to the minimum necessary for an orderly winding-up, and that no buyer gains an undue economic advantage through the acquisition of under-priced assets and liabilities.

The commission initially approved the scheme in December 2011. It has been prolonged several times since then, the last time in July 2017.