Plan for easier lending at credit unions

The Government in considering a plan to allow credit unions provide emergency loans to people who have lost their credit rating in a move that may cut reliance on moneylenders.

The Citizens Information Board and the Money and Budgeting Service (Mabs) is proposing a State-backed loan fund to help the more than 100,000 people who have lost their credit rating due to mortgage and other debt arrears and can not access funds from credit unions or banks. This lack of access to funds for back-to-school costs, household emergencies, car repairs, or other unexpected demands due to the tighter regulation of credit unions, is pushing many people into the arms of moneylenders.

Mabs says greater regulatory oversight in this sector has undermined the “ethos of credit unions significantly” and impacted most negatively on the most needy households.