LPLS & DBI Changes

Dear Members,

The Credit Union sector is operating in an increasingly challenging environment due to the impacts of Brexit and Covid-19. They have both had a considerable impact on our income. Investment interest has fallen from €406,937 in 2015 to €100,506 in 2021. This is due to falling rates of interest and negative interest rates being charged by banks on credit union deposits. COVID has had a detrimental impact on new loans. There was a lower demand for loans due to the government restrictions in place and the loan interest decreased as a result.

In order to safeguard the future of Thomastown Credit Union, the Board and Management have reviewed all costs, with a view to reducing them where possible. One of our largest costs is the range of insurance services that we provide at no extra cost to members. Last year the cost of these insurances was over €109,000, and represented 22% of our total costs. Unfortunately, due to the erosion of our investment income, and the increases in regulatory fees, risk & compliance costs, and increasing Annual General Meeting costs, it is no longer sustainable to provide the same level of insurance.

In this environment, we are having to make difficult choices. It is with much regret, that we will be reducing the Members Insurance coverage going forward. This is in line with what other Credit Unions are having to do throughout Ireland to remain viable into the future. The changes are as follows:

• Death Benefit Insurance (DBI) will not be insured or payable from 1st June 2022
• Insurance on Savings will be reduced from €5,000 to €1,000 from 1st of June 2022
• There is no change to Loan Protection Insurance.

Whilst, we understand this may not be easy for some people, we hope you, our members, will understand. This decision is necessary to remain viable into the future, so that we can continue to operate as an independent credit union.

If you are interested in a member pay option Death Benefit Insurance, please talk to a staff member.

Best regards,

Board of Directors of Thomastown Credit Union