Savings Limit Notice

The Board of Ballinasloe Credit Union took the difficult decision to limit savings to €30,000 per member from 1st February 2020. However, the total savings in Ballinasloe Credit Union continue to grow and now stand at over €110 million. While the savings increase shows that members have great confidence in the Credit Union, it also means we continue to have a growing amount of surplus funds. Under Central Bank regulations, we must maintain our statutory capital at a minimum of 10% of total assets. For every additional €1,000,000 of savings lodged, we must allocate €100,000 from our surplus to our capital reserves. This limits the Boards ability to propose dividends or invest in new products and services for members. The negative interest rate climate means that Ballinasloe Credit Union is effectively being charged by banks to hold the portion of our member funds necessary to meet our regulatory requirements. Therefore, the Board took the prudent decision to introduce a savings limit to maximise the surplus available for distribution to members and to invest in new products/services for members.

No, this has no bearing on the day to day operations of the credit union. Ballinasloe Credit Union is adequately capitalised with total reserves of €18 million and assets of just over €129 million. Each time our savings increase, we must allocate more money from our surplus funds to our regulatory reserve, thereby reducing the funds we have available to pay out a dividend or loan interest rebate. It also reduces the amount we can afford to invest in new services and new technology options that can benefit all our members. To reduce the impact of this savings growth, the decision was taken to limit savings to benefit the greater number of our members.

Your savings in Ballinasloe Credit Union are very secure and are backed by strong assets 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

The restriction applies to the total amount a member can have on deposit in Ballinasloe Credit Union. The amount is set at €30,000 so each member is permitted to have €30,000 on deposit with the credit union. Members with less than €30,000 can continue to save up to the new limit of €30,000. The limit is based on the member, not the account. So, each member is limited to a maximum of €30,000 savings, whether they are in a single account, joint account or a combination of both.

The Board of Ballinasloe Credit Union will keep the savings restriction under constant review and if they make any decision to change the current arrangement you will be notified directly of this. Given the current and projected future challenging climate of increased regulatory levies and historically low returns on investments the savings limit will be in place for the foreseeable future.

When the savings limit was introduced on 1st February 2020, members that had savings above €30,000 were not asked to withdraw their funds. However, overall savings in Ballinasloe Credit Union have continued to grow and following review, the Board has now taken the difficult decision to return funds to members who hold in excess of €30,000. Members in this category cannot make lodgements to their accounts until the balance goes below €30,000. There is no restriction on members withdrawing funds from their account.

The dividend and interest rebate are decided upon on a year by year basis at the Annual General Meeting. The amount of trading surplus will determine what amount is available for dividend/rebate. By making these changes, we are attempting to maximise the surplus available for future distribution to members.

The dividend and interest rebate are decided upon on a year by year 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.

Ballinasloe 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 limit. We continue to provide valuable loan services to the local community.

If you do not move funds prior to 1 February 2021 we will issue you with a cheque from your account for the amount in excess of €30,000 which you can lodge at another financial institution.

In keeping with the spirit of this exercise, and to ensure that it is beneficial to the overall membership, the funds should be moved outside of Ballinasloe Credit Union. Separately, placing funds in another members account could create tax implications for either you or the receiving member and tax advice should be sought in this regard.

We will be in contact with you over the coming weeks to discuss the options available for you. If you intend to leave €30,000 in your account, please remember you will be unable to lodge any further funds into your savings account until your savings balance is less than €30,000. If you have any direct debits, credit transfers, standing orders set up to come into your Credit Union savings account, you are advised to review your account. You may need to reduce your current share balance below €30,000 so that these electronic lodgements will not result in your savings exceeding the €30,000 savings limit.