Irish CU Faces Deposit Run After Rumors Spread
One credit union here found itself the victim of a good old-fashioned run on deposits when word spread it was about to collapse due to losses. Although the reports were incorrect, members of Monaghan Credit Union began lining up here to pull their savings after it revealed it was writing off approximately E3.8 million in bad loans during 2005. MCU announced the loan problem itself during an annual meeting at which it also told members that dividends were being withheld under orders from the regulator, the Irish Financial Services Regulatory Authority.
That announcement led to a panic that members would lose their savings, with members arriving at MCU before it even opened. The credit union's manager, Regina Connolly, went on local radio to address the rumors and reiterate they were not true. The regulator also issued a statement saying MCU remained solvent and that there also no liquidity issues.