Kenny backs restriction on credit union loans
TAOISEACH Enda Kenny yesterday defended the decision by regulators to restrict lending at up to 300 credit unions.
He said the Central Bank was acting in the best interest of the three million members of credit unions.
The priority, he said yesterday, was to protect the savings of members in credit unions around the country.
Mr Kenny was reacting to revelations in yesterday's Irish Independent that seven out of 10 credit unions have had some form of limit imposed on the amount of money they can lend to members.
The new rules mean some credit unions are only allowed to lend a maximum of €100,000 in any month.
Restrictions are also being placed on the amount a credit union is allowed to lend per member.
The Credit Union Managers' Association (CUMA) called for dialogue between the Central Bank and credit unions as the stricter rules were forcing many credit unions to turn down people for loans even though they could afford to meet repayments and had never been in arrears in the past.
Silena Gilleece of CUMA said many credit unions were finding they were reaching lending limits within the first week of a month.
This meant many members of good standing were being turned down for loans, leaving some with little choice but to turn to moneylenders.
Ms Gilleece said credit unions had been affected by the recession, but they have weathered the worst of it so far. She also said they were experts in lending and knew their members and their members' history.