The Board of Limerick & District Credit Union Limited have carried out a review of its members’ savings strategy considering the significant increase in savings levels so far this year which is more than €7.46m. The effect of this level of savings on the Credit Union is very serious for two reasons.
- The main banks are now charging credit unions negative interest for holding deposits with them; and
- Central Bank of Ireland Regulations dictate that for every €100 saved in the credit union, we are required to set aside
€10 from our surplus as a non-distributable regulatory reserve.
In addition, the onset of the COVID-19 pandemic has seen our loan book reduce and our savings increase. Accordingly, the Board of Directors have reluctantly taken the decision that individual members cannot hold in excess of €20,000 in their credit union accounts. You the member are affected by this decision.
*You as a member are affected by this decision and we are requesting that you withdraw funds in your account in excess of the new limit as soon as practical. If you intend to leave €20,000 in your account, please remember that you will be unable to lodge any further funds in your account until your savings balance is less than €20,000.
For Members joining after 1st September 2020, the maximum permitted share balance is €10,000 for a single member. The maximum permitted share balance for joint account is €20,000.
If you wish to transact on your account, you need to reduce the amount in your account below the maximum €20,000 allowable. If you have any automated banking transactions (incl. standing orders, online payments, pension payments) being paid to your credit union account, these need to be cancelled immediately. These actions will of course not affect your access to credit with the Credit Union.
We recognize that this maximum savings limit may cause serious disruption to the financial planning of 3.5% of our membership directly. The Board have not taken this decision lightly, but it is in the interest of safeguarding the future of your Credit Union for all its members.
We have included a question and answer guide at the back of this letter to provide details of what you now need to do because of this change. Please have up to date proof of identification and proof of address when you call to our office to enable us to update our system.
We would like to apologise for any inconvenience this matter causes. You should be aware that your shares in the Credit Union are covered up to €100,000 under the Government’s Deposit Guarantee Scheme.
Questions & Answers
Q: I currently have less than €20,000 in savings with Limerick & District Credit Union Limited. What does the maximum savings holding mean for me and what do I have to do?
A: If you currently have less than €20,000 in cumulative savings with Limerick & District Credit Union Limited, you do not have to do anything, but you will not be allowed to increase your savings above €20,000.
Q: I currently hold more than €20,000 in savings with Limerick & District Credit Union Limited. What does the maximum savings holding mean for me and what do I have to do?
A: If you currently hold more than €20,000 in savings with Limerick & District Credit Union Limited, you will need to reduce your savings below €20,000. Where necessary, Limerick & District Credit Union Limited will be in contact with you directly to discuss the next steps and will assist you to reduce your savings balance. You may need to amend any Direct Debit or Standing Order instruction as appropriate
to ensure your balance does not go back above €20,000.
If, in the meantime, you would like to move this money now, you can do so, either online or in writing to the credit union by completing the enclosed Request to Transfer Funds form and returning it to us or by calling into any of our branches. Branch opening hours information is available on our website www.mylimerickcu.ie
Q: I have a single and a joint account with Limerick & District Credit Union Limited. What does cumulative savings mean for me?
A: Each member is allowed to hold a maximum of €20,000 in savings with Limerick & District Credit Union Limited even if spread over 1 or more accounts. E.g. – a single account in your own name, sub accounts and/or a joint account with a partner or child or grandchild.
Q: I have not used my account with Limerick & District Credit Union Limited for a period of time. Do I need to update my details?
A: Any member who has not transacted on their account with Limerick & District Credit Union Limited within a 36 month period will be deemed an inactive member. Inactive members are required to provide details of Identification (e.g. passport or driving licence, as well as proof of address verification, (e.g. a utility bill dated within 6 months).