Savings Cap Notice

As of 1 May 2021, Croí Laighean Credit Union is introducing maximum savings limits on member accounts.

Why is the Savings Cap being introduced?

Since March 2020, the Board and Management have been carrying out reviews of Member savings, having seen a significant increase in the number of deposits made to Croí Laighean Credit Union throughout the Covid-19 pandemic.  Savings levels so far in 2021 are in excess of €214m, an increase of €30m over 12 months. The effect of this level of savings on Croí Laighean Credit Union is significant for 3 reasons:

1. Any Members savings not borrowed by other members must be invested. This is currently 80% of all members savings. The main banks are now charging us negative interest for holding deposits with them.
2. Central Bank of Ireland Regulations dictate that for every €10,000 of savings with Croí Laighean Credit Union we are required to set aside €1,000 from our surplus to our Regulatory Reserve, which cannot be used for any other purpose.
3. The combined effect of these reasons depletes the amount available to pay a dividend at year end and to invest in new services.

Accordingly, the Board has made the decision to act now to ensure we solidify our financial strength for the future and strengthen our reserve position.

What are the savings limits?

Effective from 1 May 2021, we are introducing the following maximum savings limit:

• Standard savings accounts (including share accounts, sub-accounts, and Everyday accounts) – maximum savings limit of €30,000.

Effective from 1 June 2021, we are introducing the following maximum savings limit:

• Current account – limit of €10,000

What if I am operating a Business or Club and Society account?

If you are operating as a Business or Club and Society account, please contact Martin Fitzgerald on 1800 23 24 25.

How many members will this affect from the effective date of savings caps?

This will affect approximately 1,600 member accounts in total which is 3.8% of total membership.

If I have savings above the savings limit, are they being returned to me?

No, members with funds above these savings limits do not need to withdraw their funds, however, they cannot make lodgements to any standard savings account until the balance goes below €30,000.

How long will the cap last for?

The Board of Croí Laighean Credit Union will keep the savings limit under constant review, if they make any decision to change the current cap, members will be informed.

Are my savings secure with Croí Laighean Credit Union?

Your savings in Croí Laighean Credit Union are very secure and are backed by strong assets, reserves and performing loans. In addition, your savings continue to be guaranteed by the Deposit Guarantee Scheme which guarantees all savings in financial institutions for amounts up to €100,000.

Will this affect members dividend and interest rebate?

The dividend and interest rebate are decided on a yearly basis at the Annual General Meeting. The amount of surplus will determine what amount is available for dividend/rebate. By introducing a savings limit, we are attempting to maximise the surplus available. Where a dividend is payable, this is payable based on your shares, which are limited as noted on the previous page.

Does this mean Croí Laighean Credit Union cannot give out loans?

Croí Laighean Credit Union is in a strong position to give out loans, subject to appropriate assessments being completed. Our ability to lend is in no way affected by the savings limits. We continue to provide valuable loan services to our members. In the past 12 months, Croí Laighean Credit Union has issued €30.8m in loans to our members and has more to lend.

Does this mean Croí Laighean Credit Union is in difficulty?

Croí Laighean Credit Union is a strong and secure financial institution.

Our Credit Union is adequately capitalised with total reserves of €28.5 million and assets of just over €241 million.

I have a Deduction at Source/Direct Debit coming into the account and would like it to continue?

If you currently deposit to your savings via direct debit or salary deduction at source, and you are over the savings limit, we would ask that you redirect these instructions as we are unable to accept any further amounts over the savings limit. However, should you wish to continue saving in this manner you should ensure that your balance is reduced to a level whereby you do not exceed the savings limit as your regular savings continue.

I have Direct Debit/Standing Order in place to my loan and my savings accounts, what do I do?

If your savings are above €30,000 please contact Croí Laighean Credit Union to amend your payment distribution to ensure your loan payments remain up to date.

Where do I obtain financial advice?

While we are not permitted to give financial advice on where you can invest your funds once you reach the savings limit, we would like to point you to independent statutory bodies who can provide information:

1. Competition and Consumer Protection Commission – ccpc.ie/consumers which is an independent statutory body and therefore gives independent and impartial advice
2. If you are going to use an independent financial advisor to help you, then The Central Bank of Ireland maintains a list of firms and individuals authorised to sell and to advise on investment products. To find this go to centralbank.ie and click on “Registers” on the bottom left-hand side of the homepage. Alternatively, if you do not have access to the internet, you can call the online register at 1890 777 777.

I still have queries about the Savings Cap, where can I get more information?

If you have additional queries, please email us at welcome@clcu.ie or you can contact our dedicated phoneline on 1800 23 24 25.