Monday 17 December 2018

Rule changes will allow credit unions to issue more mortgages

Stock image
Stock image
Donal O'Donovan

Donal O'Donovan

Rules that have restricted credit unions in the mortgage market are set to be loosened, after the Central Bank bowed to calls from the sector for a major review.

Yesterday, Central Bank Deputy Governor Ed Sibley told an audience at Trinity College that he sees "significant headroom" for credit unions to lend more to home buyers.

Today, the Central Bank will issue a newsletter to the credit union sector outlining the next steps in the process.

Credit unions can only issue 10pc of their individual loan books in long-term lending, such as mortgages. A proposal to loosen the cap will now be circulated within weeks. The sector has a total lending capacity of €6.4bn.

The credit unions themselves have long been anxious to expand more into mortgage lending as demand for small consumer loans is weak.

Small numbers of credit unions have offered mortgages before now, but are far more restricted than banks in what they can lend.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business