Jack Chambers (Dublin West, Fianna Fail)
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The credit union sector loan book is €6.6bn (consisting of €5.8bn personal/unsecured lending and €788.7m mortgage/business lending). Future growth in the loan book will be driven by growth in personal/unsecured and mortgage/business lending.

In January 2020, revised Central Bank Lending Regulations were put into effect on credit union house and business lending only i.e. there is no regulatory limit on personal, unsecured lending.

The Regulations outline:

• Combined house and business lending not to exceed 7.5% of assets of the credit union, with an inner limit of 5% of assets for business lending. This applies to all credit unions.
• Combined house and business lending not to exceed 10% of assets of the credit union, with an inner limit of 5% of assets for business lending. This applies for all credit unions above €50 million assets and with regulatory reserves greater than 12.5%. The majority of credit unions could avail of the 10% limit. To make use of this limit, qualifying credit unions need only notify the Central Bank.
• Combined house and business lending not to exceed 15% of assets of the credit union. This is subject to minimum assets of €100 million and Central Bank approval. 68 credit unions holding more than 70% of sector assets could apply for the 15% limit. The most recent figures provided by the Central bank show that 14 applications for this limit have been approved, with a further 6 in progress. I strongly encourage all eligible credit unions to apply for this higher limit.

The Government is encouraged by the continued growth in both mortgage and commercial lending for credit unions. Year on year to March 2024 mortgage lending has grown from €364.6 million to €614.9 million (an increase of 68.7%) and commercial lending has grown from €151.8 million to €173.8 million (an increase of 14.5%). This lending growth will be further supported through the enabling provisions of the Credit Union (Amendment) Act, such as member referrals and loan participations and referrals. The sector are also creating Credit Union Service Organisations ("CUSO's") for some key products such as mortgages and agri loans. These CUSOs offer a standard, nationwide product offering and will also drive growth in the sector.

Initial analysis completed by the Central Bank estimates that there is more than €2 billion available unutilised lending capacity in the sector, based on current maximum limits. I am aware that Minister Richmond, Minister of State with responsibility for credit unions has engaged with many credit union stakeholders regarding lending limits and other issues facing the sector. I am also aware that Minister Richmond has engaged with the Central Bank to discuss these issues, and the views of the recently published ICURN Peer Review Report which highlighted:,

‘Following a review of the performance of many of the mortgages that credit unions have made in the past several years, we support a collaborative approach to a review of the impact of the changes to the lending framework introduced in 2020. Without some liberalization of the limits and flexibility, the Amendment Bill of 2022 may not have the anticipated positive impact, as credit unions may question whether they can achieve the necessary economies of scale to make it worthwhile diversifying into mortgage and SME lending.’The ICURN Report also supported separation of limits for house and business lending given the different risk profiles of these types of lending.

The Central Bank are currently conducting a review of the changes to the lending framework introduced in January 2020, with an initial analysis expected by H2 2024.

I trust the Central Bank will reflect on the views of the credit union stakeholders and the ICURN report when considering any potential amendments to the regulations.