Introduction of Savings Caps2 July, 2020
In recent times, Credit Unions across the country have had to introduce caps to limit how much members can hold in their accounts at one time. Mallow Credit Union has experienced an unprecedented level of growth in member savings. While we welcome this strong show of loyalty and confidence in our financial strength from our members, this can have a negative effect on new service and product development and ultimately reduce our ability to effectively service our members’ needs.
Decisions to introduce saving caps have been taken with due consideration and deliberation by the Board of Directors. The new caps will work like so:
- There will be a new savings limit of €40,000 for all members from Saturday 1st August 2020. This will be the maximum amount of savings an individual can hold across all their accounts in total with Mallow Credit Union.
- New accounts opened after Wednesday 1st July 2020, will be subject to a maximum balance of €10,000 in their first year of operation.
The saving restrictions currently affect a small proportion of Mallow Credit Union members and we are currently notifying all affected members with instructions on what steps they need to take.
This decision was taken in the best interests of all our members and will be reviewed on an ongoing basis by the Board of Management and Directors.
Why a savings cap?
Under Central Bank regulations, we must maintain our statutory capital at a percentage of our total assets. In practical terms, this means that for every additional €100,000 of savings, we have to allocate €10,000 from our surplus/profits to our Capital Reserve.
How does the cap affect me?
If you have over €40,000 in savings across all your Mallow Credit Union accounts we are asking you to contact your local branch to make the necessary arrangements to reduce your savings
in excess of that amount. If you are unsure as to your balance or how this will affect you please contact your local branch.
Are my savings safe here?
Please be assured your savings remain safe and secure at Mallow Credit Union Limited. We are a financially strong and stable credit union. In addition, your savings continue to be guaranteed by the Government Deposit Guarantee Scheme up to €100,000.
Does this mean the credit union is in difficulty?
No, this has absolutely no bearing on the day to day operations of the credit union.
Does this mean the credit union cannot give out loans?
Mallow Credit Union Limited 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 cap. We continue to provide valuable loan services to the local community by offering great value, flexible loans. Previous lending restrictions have been lifted and we are in a position to lend up to €100,000 net of savings.
If you have any questions regarding the cap please email email@example.com or contact your local Mallow Credit Union branch.