Credit unions 'failing to check if members can repay their loans'
Credit unions have been accused by the Central Bank of issuing loans without assessing if members are able to repay the borrowings.
Regulators said some credit unions need to improve how they are run.
The Central Bank report found "a concerning number of governance and operational risks still need to be addressed".
After making 700 visits to the head offices of credit unions in the last six years, the regulator said some credit unions were still taking too many risks. The weaknesses were found at large and smaller lenders.
Registrar of credit unions Patrick Casey, who operates from within the Central Bank, called for higher standards.
He said: "Whilst governance standards have improved across the sector, governance remains one of the key risk areas for credit unions. It is concerning that over 60pc of individual risks identified during on-site engagements relate to governance or operational risks."
The Central Bank found what it said were "notable" issues around the issuing of loans in some credit unions.
It referred to some credit unions failing to assess the capacity of members to repay before providing loans, and failing to document rationales for credit decisions.
Carrying out an affordability assessment is a key regulatory requirement before a loan is issued.
The regulator did not say how many credit unions are issuing loans without carrying out affordability assessments, but did say the issue represents 19pc of risk issues identified.
Some credit unions were also found to be failing to document processes and procedures.
"In other instances, while processes and procedures were documented, credit unions were failing to implement them effectively," the report states.
Also identified was what the report referred to as inadequate segregation of duties. This meant some officials in credit unions have responsibilities for multiple functions, "increasing the risk of error and misappropriation".
And credit union boards came in for criticism.
Regulators cited issues being identified by auditors, but boards failing to respond appropriately.
"Issues were also identified in relation to the level and quality of discussion and challenge by boards," Mr Casey's report states.
The Central Bank said the majority of credit unions now have a strategic plan in place, which maps out how future growth will be achieved.
But the quality, effectiveness and the level of review of strategic plans was questioned.
The new report comes after a Central Bank report last week found that staff and directors won a prize in raffles run in a third of credit unions that have a draw.
It also found draws were conducted by staff, who were eligible to enter the draw, with no independent oversight present.