Lenihan to relax lending rules
FINANCE Minister Brian Lenihan said yesterday he would change the law to allow credit unions to give out more loans over a longer period.
The move should allow credit unions to reschedule loans and is intended to allow credit unions help members who are having financial difficulties continue to make repayments on their loans.
The extension, under Section 35 of the Credit Union Act 1997, requires an amendment to the bill and is provided for in the Central Bank Reform Bill 1010, which the Government published today.
The amendment will extend the lending limit for loans over five years from 20pc of the credit union's total loan book to 30pc.
It will also empower the Registrar of Credit Unions to impose requirements on credit unions in relation to lending practices, and also requires credit unions to have appropriate systems in place to monitor compliance with the act.
"Many credit union members are experiencing difficulty in meeting loan repayments due to unfavourable changes in their financial circumstances in the current economic environment," said Minister Lenihan.
The Irish League of Credit Unions said 2.6m members of credit unions would benefit from teh changes in the rules.