Following due consideration and deliberation, the Board of Directors of Connemara Credit Union Limited has reluctantly decided to introduce a cap of €10,000 on shares in Children’s accounts (up to the age of 16), new accounts and Club accounts in your Credit Union effective as of 01/05/2021 This decision was taken in the best interest of all members of the credit union.

It is important to note that the share cap of €30,000 in place for existing adult members will not be affected by these changes

The rationale behind introducing the cap is as follows:

• Our total savings are growing by around 5% per annum and now stand at over €26 million

• Against this, our total loans stand at €8 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.
• Also these additional savings can now attract negative interest rates from banks when we invest them, costing the Credit Union significant amounts of money and reducing our surplus making ability. Taken together, these factors cause a dilution of our capital reserve to a point where we simply have no choice but to take corrective action.
• This can have the effect of depleting the amount of our surplus at year end which 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.

The Board will keep these arrangements under constant review.

Thank you for your understanding in this matter.