CUDA supports tiered regulation for Ireland’s heterogeneous Credit Union sector

By November 29, 2017Uncategorised

“Credit unions should be permitted to lend directly to AHBs and local authorities for both social and affordable housing”

 CUDA, the credit union representative and lobby group for Ireland’s largest credit unions has welcomed today’s Oireachtas report on their review of the Credit Union sector.

Speaking at the launch, Kevin Johnson, CEO, Credit Union Development Association,

“We welcome the excellent work of the Joint Committee on Finance and its recognition that immediate priority should be given to a full review of the simplistic and outdated lending limits and concentration limits. We believe that the Implementation Group, which represents all stakeholders, is best positioned to carry this out and that very constructive work has resulted in a proposal being submitted to the Central Bank.”

CUDA say that as advocates of a tiered regulation system for credit unions in Ireland, they were pleased with the Committee’s acknowledgment of the importance of such a system.

Mr. Johnson continued,

We would like to see the urgent introduction of proportionate regulations as set out by the Commission, which will allow some credit unions to continue offering basic savings and loans only, while allowing other credit unions to develop and offer a greater range of services, provided they have what is necessary to manage the additional inherent risks.

While credit unions share the same set of values, in attempting to devise a workable solution to allow credit unions develop their businesses appropriately it must first be recognised that we do not have a homogenous sector and that is why tiered regulation is so important. The Credit Union Act recognises that each credit union will determine what services will be available to their members in their common bond, and the Act also requires regulations to be proportionate based on the nature, scale and complexity of the credit union business model.”

The network group however say that while some progress is being made to allow credit unions invest in social house projects by Tier 3 Approved Housing Bodies more needs to be done to move this along.

 Mr. Johnson went on,

“CUDA believes credit unions should also be permitted to lend directly to AHBs and local authorities for both social and affordable housing. The required enhancement to the Credit Union Act is set out in Appendix 1 of the Committee’s report.

CUDA have set out some of the highlights of the report from their perspective including the following:

  • “This Committee is determined to play its role and assist in whichever way it can by continuing to engage, monitor and evaluate the implementation of the CUAC recommendations.”
  • “The Implementation Group established following the publication of the Credit Union Advisory Committee (CUAC) report meet regularly and as necessary to oversee the implementation of the seven key recommendations contained in the CUAC report and that they present an implementation plan within 3 months of this date and that the implementation be carried out in a period of not less than 2 years.”
  • “Section 35 review. The Committee is of the opinion that the objective of this review is to ensure that a framework is delivered which will allow qualifying credit unions to develop and grow beyond the current permitted lending limits and concentration limits in a meaningful way and therefore allow qualifying credit unions to make the necessary infrastructure investment into new areas such as mortgages to facilitate this.
  • “One of the key recommendations contained in the CUAC report is for a full review of Section 35 lending limits and concentration limits, including the basis of the calculation of the limits together with the liquidity requirements attaching to same.  The Committee endorses this recommendation, notes that this is the first item to be considered by the implementation group and commits to monitor progress with regard to Section 35 lending limits.”
  • “The Committee notes that tiered supervision, with large credit unions encountering a very stringent supervisory regime (through the PRISM process) is not the same as tiered and proportionate regulation which aims to allow progressive credit unions the scope for growth as was recommended by the Commission on Credit Unions.”


Note to the Editor


CUDA, the Credit Union Development Association, was legally incorporated in 2003. In its early days it was the representative voice, on behalf of its owner member credit unions, with legislators and regulators. It has since evolved and now, as well as providing a ‘voice’, it is increasingly providing support facilities in the areas of regulatory compliance, risk management, shared services and competency development.

CUDA is a credit union owned network that enables member credit unions to engage in beneficial activities which would not have proved possible to do as single stand-alone entities. We manage the diverse interests of the members within the network to the mutual benefit of the network. In acting as a catalyst for the growth and development of credit unions, CUDA now makes many of its support services available to all credit unions.