Savvi Credit Union Limited

BACKGROUND Savvi’s principal activity is the provision of financial services to over 21,000 members. Savvi has total assets of over €377 million and is one of Ireland’s largest credit unions. Savvi is supervised by the Registry of Credit Unions (RCU) within the Central Bank. The issues giving rise to the breaches in this case came to the attention of RCU in 2017. RCU referred the matter to the Enforcement Investigations Division within the Central Bank and an investigation was commenced in May 2018. PRESCRIBED CONTRAVENTIONS Issuing long-term loans resulting in breaches of the long-term lending limit between June 2017 and December 2017 Regulation 14(1)(b)(i) of the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (the 2016 Regulations) imposes requirements on credit unions seeking to issue long-term loans. A credit union is prohibited from issuing a long-term loan if, were the loan to be issued, the credit union’s rate of long-term lending (to total overall lending) would exceed 10% (the LTL Limit). Regulation 14(1)(b)(ii) of the 2016 Regulations provides for a credit union to make an application to the Central Bank to increase the LTL Limit to a maximum rate of 15%. On 1 July 2008, the Central Bank approved Savvi’s application to avail of the maximum LTL Limit of 15%. In 2016, increasing long-term lending was a strategic focus for Savvi. Savvi’s rate of long-term lending first exceeded 10% in November 2016. From that point, Savvi’s rate of long-term lending increased month-on-month such, that by the end of June 2017, its rate of long-term lending was 15.