Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Credit unions are already allowed to offer mortgages to their members. Indeed, a number of them do. As of September, there were mortgages worth €171 million outstanding across the sector, representing a 17% increase year on year. However, the amount of mortgage lending that credit unions can engage in is limited by the Central Bank's lending regulations for credit unions, which allow only a certain proportion of a credit union's loans to be long-term loans due to lending maturity limits. These lending regulations have been under review since last October when the Central Bank commenced a public consultation. Reviewing these lending regulations is an important matter and one for which I have previously outlined my support, including in a letter that I wrote to the Central Bank Governor, Professor Philip Lane.

The proposed revisions to the lending regulations from the Central Bank contain a number of positive elements. The proposals change the basis of calculation for the limits from a percentage of loans to a percentage of assets, which is something for which the sector has been calling. The proposals would also allow larger and capable credit unions to do significantly more mortgage lending than is currently the case.

Based on the data supplied in the consultation paper, the proposals would allow in the first instance a sectoral capacity of €861 million for mortgages, which should be seen in the context of the €171 million of mortgages outstanding across the sector as of last September. This capacity would increase if applicable credit unions were approved for the higher limits. Were all credit unions with assets greater than €100 million to be approved for the higher limit, sectoral capacity could increase to a maximum of approximately €1.8 billion.

The Central Bank is in the process of reviewing the submissions received and expects to publish a feedback statement and draft regulations in the second half of 2019.

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