Savings Cap at The Lough CU
Following due consideration and deliberation, the Board of Directors of The Lough Credit Union Limited reluctantly decided to further reduce the savings cap to €30,000(Adult accounts) and €10,000(Minor accounts) on shares in the credit union effective as of 01/11/2020. This decision was taken in the best interest of all members of the credit union.
It is important to note that members who already have more than €30,000 can leave their shares in place but cannot increase their balance. Members with less than €30,000 can increase their shares to €30,000, but no more than that amount. The same goes for Minor accounts but with the new limit of €10,000. The Board will keep these arrangements under constant review.
The rationale behind introducing the cap is as follows:
Our total savings are growing significantly month on month and now stand at just under €80 million.
Against this, our total loans stand at €13 million, which means we have a rapidly growing amount of surplus funds.
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.
This can have the effect of depleting the amount available to pay a dividend at year end. It also reduces the amount we can afford to invest in new services and new technology options that can benefit all of our members.
To reduce the impact of this, your Board is trying to limit the growth in savings in order to benefit the greater number of our members. Thank you for your understanding in this matter.