Court Finds Irish League Has 'Abused' Its Position

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The Irish League of Credit Unions has been found by this country's high court to have "abused" its position in the market for credit union representation.

The 170-page decision from Justice Nicholas Kearns upheld action that had been taken against the Irish league by the Competition Authority, the equivalent of the U.S. Justice Department. Following 11 days of arguments, the judge ruled that certain league rules are anti-competitive.

According to the World Council of Credit Unions' David Grace, no decision has been made on whether the Irish league will appeal to Ireland's Supreme Court.

The Competition Authority had charged that the ILCU breached Ireland's Competition Act by requiring credit unions to be members of the league before they participate in the Savings and Protection Scheme. Grace said the scheme is similar to deposit insurance in the U.S. or to the types of stablilization funds that are in place in some countries.

At issue was whether the requirement ILCU-member credit unions use the loan protection and savings insurance coverage from a company controlled by the league was abuse of its "dominant position in the market for credit union representation." The legal action followed a threat from the ILCU in 2003 to disaffiliate certain member credit unions that had declined to purchase the coverage. Some of those credit unions joined another group, the Credit Union Development Alliance.

The Irish league represents 540 credit unions with combined assets of nine-billion Euros.

According to Grace, the court has not yet ruled on what penalties will be assessed in the case, and the ILCU is awaiting that decision before taking any action. Grace added he believes the situation is unique to Ireland because of the way the league and its subsidiary are structured.

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