Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The Central Bank has no interest in assisting credit unions in getting into the mortgage market in any significant way. The Minister mentioned an overall figure of 2.7% of the loan book across the sector being out for a period greater than ten years. The figure is somewhat higher for a number of credit unions, but all it would take is a small number of mortgages for each individual credit union to get them over the 10% limit, which would mean that they would then be in breach of the rules. That is the reality. A small number of credit unions have had an increase of 15% in the limit regarding their loan book over a ten year period.

The reality is that for credit unions to get into the mortgage business in a significant way requires investment in underwriting and expertise. A certain amount can be done on a shared basis across the sector, but the current restrictions, which are a matter for the Minister and not just the Central Bank, are preventing them from doing that. We need competition in the mortgage market, and credit unions offer the potential for that.

We should not be under any illusions, however, given the current restrictions of 10% of lending over ten years. It is not possible for credit unions to get involved in the mortgage market in any serious way under the current rules.

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