Noonan ‘kills rumours’ of halt to credit union loans

CHRISTMAS will not be cancelled for struggling families depending on credit union loans to get them through the festive season, Finance Minister Michael Noonan has pledged.

Mr Noonan hit out at “damaging rumours” that Government plans to pump up to €1bn into the money-lending organisations would mean an end to smaller transactions.

“Stories circulated that people would not be able to enjoy Christmas because the traditional temporary lending which they availed of from credit unions to pay for Santa Claus would not be available. It was reported that limits were so low credit unions would not be able to lend to the traditional creditors who sought loans at Christmas. That is not true,” he told the Dáil.

The minister said he had to act as there were a number of credit unions on the brink of collapse. He estimated the cost to plug the financial gap would be between €500m and €1bn.

“It is true that the regulatory authorities have issued limits on the amount of lending that can be engaged in by credit unions. Some 50% of credit unions are subject to lending restrictions at the current time. Almost all credit unions with lending restrictions have a maximum individual loan size restriction. Claims were made in the Seanad and in newspapers that the Registrar of Credit Unions placed restrictions of approximately €1,500 per saver on a number of credit unions. It is not the case, even though it is widely believed that it is.

“Some 70% of credit unions who have restrictions placed on them can lend up to €20,000 or more to an individual member. Only nine credit unions are restricted to loans of less than €10,000 to an individual member. The figures of €1,000 and €1,500 to which people referred are fictional. Facts always kill rumours,” he said.