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Irish Independent
Irish Independent
Charlie Weston Twitter Email

Central Bank says it overcharged credit unions for contributions to rescue fund

The Central Bank of Ireland

A number of credit unions are in line for a refund from the Central Bank after an error was made in how much they should contribute to a fund operated by the regulator.

A mistake was made by Central Bank officials when calculating how much some credit unions should contribute to the Deposit Guarantee Fund.

This is the fund that pays out up to €100,000 per depositor if a deposit-taking institution collapses.

There is no impact on credit union members from the error, but a number of credit unions can expect a refund from the operators of the fund.

It was not immediately clear how many credit unions are impacted by the blunder.

The amount of the miscalculation is around €253,000 in total, according to the Central Bank.

In a statement it said: “The Central Bank of Ireland has today written to member institutions participating in the Deposit Guarantee Scheme and confirmed that it has identified errors in its calculation of institutions’ contributions to the Scheme.

“These errors resulted in some member institutions, mostly credit unions, being overcharged and some being undercharged, by an overall equal amount.”

It said it was still assessing the calculations, but its initial findings are that two years’ contribution processes are affected for 2019 and 2021.

It said the error amounts to around €253,000 across all institutions, which is less than 0.1pc of the total value of funds collected.

“Due to the nature of the calculation process, it will result in undercharges and overcharges to a number of member institutions, but there is no effect on the overall value of the scheme,” the Central Bank said.

“We apologise for this and we understand and regret any inconvenience that may arise, for credit unions in particular, as a result.

“It is clear from our initial assessment, however, that the maximum undercharges/overcharges involved are not in any way significant in terms of the financial position of any individual credit union,” the Central Bank said.

Regulators said they will move as quickly to finalise their assessment, to identify next steps and to regularise the position of the institutions affected.

The assessment is expected to be completed next month.

The Central Bank said it will communicate its planned process for regularising the position in terms of monies due to the fund, or monies due from the fund, for all affected institutions.

“We will prioritise refunding overcharges to affected institutions,” it said.

In the meantime, no immediate action is required by any institution until they receive further communication on this matter, the regulatory body said.

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