As expected, members of the movement’s main representative body — the Irish League of Credit Unions (ILCU) — voted in favour of the move at its annual meeting at the weekend in CityWest in Dublin.
Members have voted to make funding available for a centralised support structure, which would take the administrative burden associated with mortgage lending. The ILCU has been working on a mortgage lending model that meets Central Bank approval for some time and the new support structure is expected to be in place by the end of this year.
ILCU chief executive Ed Farrell said entering the mortgage market would allow credit unions “realise their full potential”, saying they would provide a viable alternative to existing lenders.
“Expanding loan services to encompass mortgages has been a priority area for credit unions for some time. Credit unions will play an important role in diversifying the current mortgage lending market which is sorely lacking in competition,” he said.
Prior to the AGM, the ILCU said there was a pent-up demand, among its members, for mortgage service provision and a Dublin City University (DCU) study said there would be considerable benefits for consumers if credit unions did enter the mortgage market.
The Central Bank was also represented at the ILCU meeting. The regulator’s head of credit institutions supervision Ed Sibley said the Central Bank remains committed to engaging with the sector in order to achieve its “long-term wellbeing”.
However, while he noted that the Central Bank was engaging with sector representatives on longer-term lending, including mortgages, Mr Sibley said that no credible, well-thought through, cross-sector proposal had been submitted t o the Central Bank for its consideration on this topic to date.
“Credit unions are an important part of the Irish financial sector and we share a common objective of ensuring sound credit unions that protect members’ funds and can thrive into the future,” he said.