Central Bank says credit union debit card breaches regulations

While the credit unions argue that they're not launching a new account...

Central Bank says credit union debit card breaches regulations

Photocall file photo

The Central Bank believes that a move by 11 credit unions to offer customers debit cards and compete with banks' current account business is a breach of the State's financial regulations, according to the Irish Times.

The plans of the group, known as DCG Card Services, were unveiled on Tuesday with the scheme set to be rolled out to over 350,000 credit union members over the coming weeks.

This was despite the fact they had not received Central Bank approval.

The Central Bank has argued that products of its ilk must be supported by an appropriate transaction account.

It also said that the service "is subject to formal application and approval".

DCG Card Services stated that it had been in talks with the Central Bank for the past four years.

It says the debit card is an "exempt addition service" that does not need approval:

"We are not launching a new account. The debit card will operate on existing members’ accounts".

The participating credit unions are Health Service Staff's credit union; St Canice's in Kilkenny; Waterford; Ballyphehane, Gurranabraher and Mitchelstown in Cork; Tipperary; Mullingar, Co Westmeath; Navan, Co Meath; and Tralee in Kerry; and Tullamore in Offaly.

The MasterCard debit card is expected to cost upwards of €36 annually if it is finally launched.