DUBLIN, Ireland – The Irish Competition Authority (CA) has blocked the disaffiliation of several credit unions by the Irish League of Credit Unions (ILCU). The decision pending a full hearing is the result of "ongoing discussions with regard to the League's insurance requirements for member credit unions. The main issue is the entitlement of non-League affiliated credit unions' right to access the savings protections scheme, the scheme set up by the League to protect credit union members' savings in the event of a credit union encountering financial difficulties," according to a news release issued by ILCU's solicitors (attorneys) McCannFitzgerald. The savings protection scheme works on the same principle as NCUA National Credit Union Share Insurance Fund to protect members' savings. There are some differences though between the two. For example, savings are only protected up to 12,500 Euros (US$14157). The insurance is funded through the ECCU, ILCU's subsidiary, not the government. But league credit unions pay into the scheme. If the unnamed credit unions were disaffiliated they could lose some 9 million Euros (US$10 million). The renegade credit unions allegedly wanted to get their insurance cover from someone other than ECCU. The CA was their tool. The purpose of the CA according to the CA Web site, www.tca.ie is to encourage "greater competition in the economy." They believe this "stimulates innovation and efficiency among business; enables consumers to buy goods and services at the best possible price; and enhances overall national competitiveness." The CA takes action when "anti-competitive behaviour occurs when firms agree to fix prices, limit output, divide business between them or abuse their market power, with no benefits to consumers." ILCU does not feel this is the situation when they limit their services to their members. They feel their members should follow the rules set down. ILCU pointed out that those rules were voted on by the full membership, including those who want to break them now. ILCU's CEO Liam O'Dwyer said that "the League Board has received detailed legal advice from McCann FitzGerald Solicitors, supported by economic advice, that mandatory insurance does not contravene the Competition Act 2002 and that the League Board are entitled to disaffiliate credit unions who do not comply with these rules." O'Dwyer termed the CA's ruling delaying disaffiliation "disappointing." The unnamed credit unions are allegedly trying to set up their own league. The exact number was not able to be determined although different sources in the movement gave estimates from five to twenty. There are approximately 300 credit unions belonging to ILCU. One source, who asked to remain anonymous, said he believed that Tullomore Credit Union was heading up the complaint and the rival movement. Tullomore's General Manager did not return Credit Union Times' telephone calls. To reduce litigation costs, ILCU agreed before the High Court to postpone any decisions about the disaffiliation pending a final hearing. "We have at all times sought to co-operate with the Competition Authority. Our legal and economic advice is that the League's rules and practices do not breach competition law. We are satisfied that our position is correct. We are confident that the courts will uphold this position," O'Dwyer said. The matter is expected to be resolved quickly at a hearing to be held in October. -

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