Following due consideration and deliberation, the Board of Directors of Monaghan Credit Union Limited has reluctantly decided to introduce a cap of €30,000 on shares per member effective as of 1st January 2020. This decision was taken in the best interest of all members of the credit union.
It is important to note that members who already have more than €30,000 can leave their shares in place but cannot increase their balance. Members with less than €30,000 can increase their shares to €30,000, but no more than that amount. The Board will keep these arrangements under constant review.
The rationale behind introducing the cap is as follows:
- Our total savings are growing by approximately 8% per annum and now stand at €73.6million.
- Against this, our total loans stand at over €17 million, which means we have a rapidly growing amount of surplus funds. We also face the challenge of a low interest rate environment which is greatly reducing the investment income that Monaghan Credit Union Limited can earn.
- Under Central Bank regulations, we must maintain our statutory capital at a percentage of our total assets. In practical terms, this means that for every additional €100,000 of savings, we have to allocate €10,000 from our surplus/reserves to our Regulatory Reserve.
- This can have the effect of depleting the amount available to pay a dividend at year end. It also reduces the amount we can afford to invest in new services and new technology options that can benefit all of our members.
To reduce the impact of this, your Board is trying to limit the growth in savings in order to benefit the greater number of our members. We appreciate your trust and loyalty and we will continue to offer quality products and services in line with your needs.