On 6 November 2019, the Central Bank of Ireland (the Central Bank) reprimanded and imposed a fine of €185,500 on Savvi Credit Union Limited (Savvi) for three breaches of credit union legislation. Savvi has admitted the breaches.
The Central Bank determined that the appropriate fine was €265,000, which was reduced by 30% in accordance with the settlement discount scheme provided for in the Central Bank’s Administrative Sanctions Procedure.
The breaches occurred between 2013 and 2017 and related to the following:
- Failure to comply with the Central Bank’s limit for long-term loans.
- Failure to put in place appropriate systems, controls and governance arrangements to manage long-term lending.
- Paying remuneration to a director, which is prohibited under credit union legislation.
Long-term lending (or long-term loans) in this context refers to lending exceeding 10 years. The Central Bank sets lending limits to mitigate risks specific to long-term lending including credit, liquidity and concentration risk.
In July 2017, Savvi notified the Central Bank that it had breached the long-term lending limit at the end of June 2017. Despite this, Savvi issued a further nine long-term loans between July 2017 and December 2017. Each of the nine loans represented a breach of the relevant long-term lending limit set by the Central Bank. The investigation found that Savvi’s systems, controls and governance arrangements were deficient in a number of respects.
Payment of remuneration to a director is expressly prohibited under credit union legislation. Savvi reimbursed travelling expenses, totalling €28,341, over a period of four years in excess of the applicable Civil Service Rates. This constituted the payment of remuneration.
As published by the Central Bank of Ireland