Three credit unions merge and create ‘top 10’ lender with 48,000 members

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Three south Dublin credit unions have come together in a move that creates one of the top 10 community lenders by size.

The merger of Capital, Francis Street and St Kevin’s has been ratified and means that the new combined entity will have 48,000 members.

Dundrum-based Capital has already taken over a string of other credit unions, including the UCD staff operation, along with Knocklyon, Sandymount and Drimnagh.

The new, enlarged Capital will be one of the largest top 10 community credit unions in the State, according to chief operations officer Pat Byrne.

The new group will have assets of close to €200m.

Both St Kevin’s and Francis Street are small lenders, with fewer than 3,000 active members each.

The rationale for the link-up is to achieve economies of scale.

Even small credit unions are required to have compliance officers, with many of the lenders struggling to get suitable candidates for boards and for oversight committees.

Mr Byrne said the enlarged credit union would now be able to offer additional services to its members and invest in upgrading its IT systems.

He said Capital was exploring offering larger loans for things such as home extensions.

The old St Francis Street office and the St Kevin’s Parish office, both in Dublin 8, will be retained and become branch offices of Capital.

The larger lender will also have branches in Ballinteer, Knocklyon, Sandyford, Sandymount and Drimnagh.

In March, the Central Bank imposed a fine of €125,000, after finding that the old Drimnagh Credit Union had been paying directors and members of its oversight committee a number of years ago.

Credit unions are prohibited by law from paying their directors and positions are filled by volunteers.

The Central Bank said that payments to directors and the board oversight committee, totalling €16,000, were made between 2013 and 2015 for services provided and in the form of expenses.

Directors, who were not named, were paid to attend League of Credit Unions meetings and also received expenses ‘on the double’.

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