Rush Credit Union Compensation Payments Issued

By DGS
Thursday, 10th November 2016
Filed under:
10th November 2016 : Deposit Guarantee Scheme Compensation Payments Issued

Following the invocation of the Deposit Guarantee Scheme (DGS) on 2nd of November 2016, the DGS has today issued compensation payments by cheque to approx. 9700 members of Rush Credit Union.  The total amount of compensation paid to date amounts to €22.3 million, representing 98% of deposits covered by the Scheme.  Members should start receiving their payments from 11th of November 2016.

In certain cases the DGS may need some additional information before compensation payments can be made.  For example, a Change of Address Form must be submitted prior to issuing payments to depositors where current address details were not available to the Credit Union.  The DGS Change of Address Form can be found here.

2nd November 2016 : Deposit Guarantee Scheme Invoked for Rush Credit Union

The Central Bank of Ireland (“Central Bank”) has made an application today to the High Court to have joint provisional liquidators appointed to Rush Credit Union Limited ("Rush Credit Union"). Jim Luby and Tom Rogers of McStay Luby were appointed as joint provisional liquidators by the President of the High Court, Mr Justice Peter Kelly.

Following the appointment of the joint provisional liquidators, the Deposit Guarantee Scheme (the “DGS”) has been activated. Payments will automatically issue to the address held on file by the credit union. Members do not have to contact the credit union or the Central Bank, as compensation payments will automatically issue by cheque to all duly verified depositors. The DGS will make compensation payments as early as possible within the statutory deadline of 20 working days to duly verified depositors.

 

FORMS

Depositors who wish to notify the DGS of a change to their address should click here to download a Change of Address Form.

Nominees/Personal representatives of deceased depositors should click here if they wish to download a Deceased Depositor Claim Form.

Compensation payments issued to depositors are based on the amount held in shares and/or on deposit less any arrears that were due on the appointment of the Joint Provisional Liquidators to Rush Credit Union Limited.  If you believe that the compensation amount you have received is not reflective of your shares/deposit holding, less arrears please click here to download a Depositor Claim Form.

Answers to Rush Credit Union member questions about the DGS can be found in our FAQs.




 

General

Why has this action been taken?

The Central Bank has been monitoring Rush Credit Union over a number of years and during that period has investigated aspects of its business. The Central Bank is of the view that there are a number of reasons for the failure of Rush Credit Union which have manifested over an extended period of time, including issues relating to governance, internal controls, lending practices and valuation of its premises. Despite assurances given by Rush Credit Union to the Central Bank, and the credit union having been provided with an opportunity to address the issues concerned, in the opinion of the Central Bank, they have not been adequately addressed. In applying for winding up, the Central Bank has also considered Rush Credit Union’s recent financial performance and its constrained capacity to ameliorate its distressed financial position. In particular Rush Credit Union is currently balance sheet insolvent (based on 31 August 2016 management accounts submitted to the Central Bank by the credit union).

All members’ eligible deposits will be compensated by the Deposit Guarantee Scheme (DGS).

What will this mean for members of Rush Credit Union?

Joint Provisional Liquidators have been appointed to oversee the closure and wind down of Rush Credit Union pending a final decision of the court.  All issues relating to the wind down of services will be managed by the Joint Provisional Liquidators.  

Following the appointment of the Joint Provisional Liquidators, the Deposit Guarantee Scheme (DGS) has been invoked.  Members of Rush Credit Union will receive compensation in respect of their eligible deposits up to €100,000 per depositor. The DGS will make compensation payments as early as possible within the statutory deadline of 20 working days to duly verified depositors. 

This action removes credit union services from members of the credit union. Are there any arrangements in place to provide these services in the local area?

The Central Bank is conscious that there is a demand for the services of a credit union in the local area and will examine what arrangements can be put in place to provide specific credit union services in the community in the future.  The Central Bank is keen that credit union services are available to the people of Rush and Lusk.

In some cases members may be able to avail of services in another credit union in the area as the common bond may extend into their locality or through their place of work.

What happens to my loan now that Rush Credit Union is in liquidation?

You should continue to make repayments in accordance with the terms and conditions of any loan. The liquidation does not imply any change in members’ repayment obligations e.g. a faster repayment schedule cannot be imposed. Payments will continue to the term as set out in the existing terms and conditions.  The Joint Provisional Liquidators will contact all members with outstanding loans to make arrangements for repayment.  


If you have any queries you can contact the Joint Provisional Liquidators on 01 676 3566.

What will happen to loan applications from members? Will loans be processed?

As the Credit Union has been placed in liquidation, loan applications will not be progressed any further.

What is the role of the Joint Provisional Liquidators? Who has been appointed as Joint Provisional Liquidators and how can they be contacted?

The Joint Provisional Liquidators of Rush Credit Union, Jim Luby and Tom Rogers, are court appointed officials and are fully independent of Rush Credit Union.  The Joint Provisional Liquidators main objectives are (i) to work with the DGS to ensure that compensation is paid to duly verified depositors and (ii) to ensure that the best results are achieved for Rush Credit Union’s creditors by making arrangements for the continuing payment of loans etc.   All queries relating to loan repayments should be directed to the Joint Provisional Liquidators.  

Jim Luby and Tom Rogers of McStay Luby have been appointed as Joint Provisional Liquidators of Rush Credit Union.  The contact details for the Joint Provisional Liquidators are provided below:  

By Post - McStay Luby, Dargan House, 21-23 Fenian Street, Dublin 2
Website – www.mcstayluby.ie
Email – rescue@mcstayluby.ie
Phone – 01 676 3566

Is this the first time that the DGS has been activated?

No. The DGS was activated following the liquidation of IBRC in June 2013 and Berehaven Credit Union in July 2014.

Payment of DGS Compensation

How will I get my money? When will I get my money?

There is no need for members to make a claim for DGS compensation.  The Joint Provisional Liquidators will provide details of duly verified eligible members and account balances to the DGS. The DGS will then make payments by cheque which will be sent to members at the address held by Rush Credit Union.

How long will it take for my cheque to clear if I lodge it to my bank account?

Cheques usually clear within 3-5 working days.  More information can be found on the Banking and Payments Federation of Ireland website.

My address has changed. Can you send the cheque to my new address?

Where Rush Credit Union was not advised that you had changed address, payments will be issued to the last address held for you by Rush Credit Union.  In order for a payment to be issued to your new address you will need to complete and return a DGS Change of Address form.   
Where Rush Credit Union was aware that you had changed address but did not hold updated address details, payment will be deferred pending receipt of a completed DGS Change of Address form.  

The DGS Change of Address form can be downloaded from depositguarantee.ie. Completed forms should be posted to the address provided on the form.

Can I submit the DGS Change of Address Form or Deceased Member Claim Form by email, fax or via the DGS website?

The DGS requires the original form along with original supporting documents in order to process a claim and therefore forms can only be submitted by post to the DGS.  The supporting documents that are required are listed on the relevant form. You can download this form from depositguarantee.ie

What happens where an account holder has died?

The DGS Deceased Member Claim Form should be completed by the deceased member's Credit Union Savings Nominee/Personal Representative.  The DGS Deceased Member Claim Form can be downloaded from depositguarantee.ie

My child has a savings account with Rush Credit Union. What will happen to his/her savings?

The DGS will automatically send a cheque in the name of the account holder for the balance of their account at the date of liquidation.  It will be necessary for the account holder to have an account at an alternative institution to lodge this cheque.

What should I do if I disagree with the amount of compensation the DGS has paid me?

If a member does not agree with the amount that they are paid they should complete a DGS Depositor Claim Form and post it to the DGS at the address detailed on the form.

Compensation payments issued to depositors are based on the amount held in shares and/or on deposit less any arrears that were due on the appointment of the Joint Provisional Liquidators to Rush Credit Union Limited. If you believe that the compensation amount you have received is not reflective of your shares/deposit holding, less arrears please click here to download a Depositor Claim Form.

Is my budget account with the Credit Union covered?

Budget accounts with a credit balance are covered by the DGS.  A budget account can have either a debit or credit balance depending on the outflow of funds to meet scheduled bills.  If you have a debit balance on your budget account you will be required to repay the amount owing.

I had a deposit account in Rush Credit Union but I withdrew money. I now have an un-cashed cheque representing my deposit balance. Do I qualify for compensation?

Un-cashed cheques relating to deposit account balances held in Rush Credit Union may be eligible for compensation.  If you have a cheque of this type please contact the Joint Provisional Liquidators.

Calculation of DGS Compensation

How will the DGS calculate how much compensation I am entitled to?

The maximum compensation payable is €100,000 per depositor per institution.

It is based on the balances on accounts in Rush Credit Union as at close of business on the date that the Joint Provisional Liquidators were appointed and includes any interest due up to that date. All balances held in the member’s name (including balances held in a joint account or as a beneficiary in a trustee account) are aggregated for the purpose of calculating the maximum compensation owed to the member by the DGS.

The DGS will receive information from the Joint Provisional Liquidators detailing deposits that are eligible for compensation together with a breakdown of individual accounts and balances. The amount of compensation you receive will be the total balance on all your accounts as at the date of the appointment of the Joint Provisional Liquidators less any arrears that were due in respect of loans that were provided to you by Rush Credit Union Limited. The maximum amount of compensation payable by the DGS is €100,000 per depositor.

Will any of the money I owe to Rush Credit Union be offset against my savings when you calculate the amount of compensation payable?

As a general rule, liabilities such as loans are not set off against deposits when calculating DGS compensation.  However, the Joint Provisional Liquidators where entitled to do so may set off arrears where they have fallen due on or before the date of the liquidation.

The Joint Provisional Liquidators will contact all members to detail arrangements for repayment of loans.

If you have any queries about loans or treatment of arrears you can contact the Joint Provisional Liquidators on 01 676 3566.

A payment was made into my account the day / a few days before the Joint Provisional Liquidators was appointed to Rush Credit Union, but this amount does not appear to have been applied to my balance. Will the balance on my account be updated to reflect this payment?

The DGS will receive information from the Joint Provisional Liquidators, which will detail the individual deposit balances of all accounts held by members. If a member does not agree with the amount that they are paid they should complete a DGS Depositor Claim form and post it to the DGS at the address detailed on the form.  The DGS Depositor Claim form will be made available on depositguarantee.ie

I have my money in a joint account in Rush Credit Union. How will the DGS pay compensation?

In the case of a joint account, in the absence of special provisions that override the standard arrangement of splitting equally, a joint account shall be divided equally among the depositors.  The amount each account holder receives in respect of a joint account will be aggregated with any other balances held by that account holder. This means that each account holder in a joint account would be eligible for compensation up to the maximum limit of €100,000 per person.