The Board of Directors has taken the decision to introduce a savings cap on the amounts that new members can lodge in their accounts. For new members joining on or after Monday 19th December 2022, the maximum amount that they can hold in their account will be €20,000.
Members who have joined North Midlands Credit Union prior the 19th December 2022 can continue to hold up to a maximum of €100,000 in the Credit Union.
This was a difficult decision for the Board as one of the core principals of the Credit Union is to encourage members to save and provide for their future. However, Regulatory requirements set by the Central Bank require credit unions to hold reserves of a minimum of 10% of the value of all members savings in a Capital Reserve account. Put simply, for every €100,000 our members have saved with us we must allocate €10,000 from our surplus to this reserve.
The cost of meeting this Central Bank requirement has resulted in many credit unions introducing limits on how much members can have in savings.
We have experienced very strong growth in member savings in recent years. Savings increased by €31.5 million in our 2022 Financial Year, meaning an additional reserve requirement of over €3 million. Currently the Credit Union is unable to generate surplus on an ongoing basis to meet this requirement. Therefore, the Credit Union has no option but to introduce a savings cap to reduce the inflow of savings into the Credit Union.
The Board of North Midlands Credit Union will keep the savings restrictions under constant review. Members will be informed should there be any further changes to these saving caps.
I joined as a member of North Midlands Credit Union prior to 19th December 2022, am I affected by this decision?
No, the new savings cap currently only applies to all new members joining on or after Monday 19th December 2022.
Members who have joined North Midlands Credit Union prior the 19th December 2022 can continue to hold up to a maximum of €100,000 in the Credit Union. Further deposits which bring the balance above the €100,000 maximum limit, will be rejected and will automatically be returned.
What is the savings cap?
The savings cap is the maximum level of savings you can hold as a member in your Credit Union Account with us. This cap will be €20,000 for all new members from Monday 19th December 2022.
What will happen if I exceed the savings cap?
Funds received electronically that will bring the balance over the savings cap will be returned to the account which remitted the funds.
Lodgements at the counter cannot be processed if the new balance exceed the savings cap.
Is lending affected by the savings cap?
North Midlands Credit Union is in a strong position to issue loans, subject to appropriate assessment and underwriting being completed. Our ability to lend is in no way affected by the savings cap.