02-07-2025
- Business
- Irish Independent
Donegal credit union fined for taking cash from people who were not its members
Swilly Mulroy Credit Union, of Bridgetown, was fined €36,000 after the regulator found it operated a practice of soliciting and accepting cash from depositors who did not hold accounts with the credit union.
The 2010 Criminal Justice (Money Laundering and Terrorist Financing) Act requires firms to put in place safeguards against the risk of money laundering.
In a statement, the regulator for the sector said: 'The Central Bank's investigation found that Swilly Mulroy operated a practice of soliciting and accepting cash from depositors who did not hold accounts with the Credit Union.
'This money would then be electronically transferred to a branch of a local bank, without first being deposited in an account in the customer's name at Swilly Mulroy.'
The Central Bank, which incorporates the Registrar of Credit Unions, said as a result of this action, Swilly Mulroy failed to conduct the necessary Anti-Money Laundering checks on the depositors and the transactions.
It said this specific cash intensive practice had been flagged to the credit union sector as presenting a heightened money laundering risk.
The investigation found that Swilly Mulroy operated in this way between January 2014 and June 2021.
Over that period it processed €8,751,694 in deposits from 2,329 cash lodgements.
The Central Bank statement said the 'board of Swilly Mulroy was aware of the risks associated with the practice from 2015 but failed to act on its risk management obligations under the 1997 Act'.
A new management team ceased the practice in 2021 and subsequently brought it to the attention of the board.
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The issue was not brought to the Central Bank's attention and was discovered in 2022 during an inspection by the Central Bank's Anti-Money Laundering Division, it said.
The Central Bank commenced this enforcement investigation in 2023.
The investigation yielded multiple examples of cash lodgements, which in the usual course should have triggered additional and careful scrutiny but instead were processed without any Anti-Money Laundering checks.
Swilly Mulroy has admitted the prescribed contraventions and has agreed to the undisputed facts in the case.
Central Bank's Director of Enforcement Colm Kincaid said where firms allow gaps in their control framework, they create opportunities for criminals and terrorists to use our financial system to pursue their illegal activities.
'This action demonstrates the Central Bank's continued focus on firms' compliance with their legal obligations to safeguard the integrity of our financial system,' he said.
