Credit Unions say new limits will allow them to double mortgage lending

Previously, credit unions could lend a combined 15% of total assets in either home or business lending .

New lending limits for the credit union sector have come into effect, raising the sector's lending capacity by €6.6bn.

The key changes include increasing the lending limit for home loans to 30% of total assets, increasing limits for business loans to 15% of total assets, and decoupling the concentration limits for home and business lending. 

The need for a business plan for business loans of more than €25,000 has also been lifted.

Previously, credit unions could lend a combined 15% of total assets in either home or business lending, a maximum of just over €3bn. Based on total assets of €22.05bn, the sector now has the capacity to advance up to €6.6bn in home loans and €3.3bn in business loans. 

Minister of State for Credit Unions, Robert Troy. said the changes coming into effect this week will help to diversify the Irish lending market. "Allowing credit unions to increase their home and business lending will help to promote competition and deliver better outcomes for consumers," he said. 

"Credit unions have a unique national footprint right around the country, and access to community-based financial services continues to be hugely important. That presence makes them ideally placed to offer choice and access to financial products for people across the country.”

Helen Carbery, CEO of Credit Union Development Association (CUDA) said the reforms, developed following extensive engagement with the Central Bank, give credit unions the capacity and flexibility to better serve their members. 

"The changes will help Irish credit unions to become an even stronger contender in the Irish mortgage market."

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"With these changes, credit union mortgage lending could more than double in the years ahead - and this could put credit unions in the top five mortgage lenders. Ultimately, it will be consumers who will be winners as each credit union is owned by their members with their financial wellbeing at the heart of the decisions made by them."

"The increase in the business lending limit to 15% of total assets is a particularly positive step. It empowers credit unions to provide greater support to local SMEs, the backbone of the Irish economy. 

"By offering accessible, community-based finance, credit unions can help small businesses invest, expand, and create jobs, sustaining economic resilience in towns and villages across Ireland."