Written answers
Thursday, 3 April 2025
Department of Finance
Credit Unions
Brendan Smith (Cavan-Monaghan, Fianna Fail)
Link to this: Individually | In context | Oireachtas source
76. To ask the Minister for Finance if he has engaged with the Central Bank to review credit union lending limits to enhance their ability to serve members; and if he will make a statement on the matter. [16084/25]
Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source
It is important to note that there are no limits on personal lending which continues to comprise the vast majority of credit union lending (approximately 86% as at end December 2024).
In January 2020, revised Central Bank Lending Regulations were put into effect on credit union house and business lending only. The Central Bank has recently completed a review and analysis of credit union sector lending three years post-commencement of the amending regulations. This review included significant consultation with credit union stakeholders. The former Minister of State with responsibility for credit unions and my officials had multiple constructive and open engagements with the Central Bank as part of that review.
On 11 December 2024, the Central Bank published Consultation Paper 159 - Consultation on Proposed Changes to the Credit Union Lending Regulations alongside a report on Credit Union Lending (the Review Report) on the Central Bank website. This consultation closed on 11 February 2025.
In the consultation paper, the Central Bank proposed a number of targeted material changes to the credit union lending regulations in the following areas:
- Concentration limits for house and business lending; and
- Lending practices for specific categories of lending.
- decouple the limits to prescribe new separate concentration limits for house lending and business lending;
- remove tiering whereby all credit unions regardless of asset size may avail of the same concentration limits;
- adjust the lending capacity available to all credit unions for house and business lending, within the new concentration limits, as follows:
- house lending - 30% of total assets
- business lending - 10% of total assets
I broadly welcome the proposed changes to the lending framework which will allow for an increase of c. €5.7 billion in capacity across business and house lending for the sector. I am supportive of the changes proposed and I wish to thank the team at the Registry of Credit Unions for their dedication and hard work in developing these proposals.
I also welcome the proposal that the compulsory regulatory requirement for a comprehensive business plan for all business loans above €25,000 will be removed. Credit unions will now be able to apply their respective lending procedures on the requested loan.
The Minister of State with responsibility for credit unions and I both appreciate the importance of these proposed changes to the lending regulations. We will both continue to monitor the consultation process and ultimately the timely implementation of the proposed amendments. I look forward to further engagement with the Central Bank in the second quarter of 2025 as part of the statutory consultation process as required under S84A of the Credit Union Act, 1997.
No comments