Regulator sees 'no rationale' to change credit union reserve requirements

Calls for changes to be implemented to allow credit unions to snap up a greater portion of the lending market, particularly when it comes to mortgages

The value of credit union mortgages issued surged 71% in annual terms to the end of March and the credit union mortgage loan book surpassed €500m for the first time, according to ILCU Picture: Leah Farrell/Rollingnews.ie

The Central Bank said there was no rationale for credit unions to use capital buffers, which would boost reserves and possibly lead to an increase in lending by the member-owned financial institutions.

The current reserve requirement for credit unions is non-risk weighted, unlike traditional banks, but some have called for changes to be implemented to allow credit unions to snap up a greater portion of the lending market, particularly when it comes to mortgages.