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CUDA comments on CBI Financial Conditions of Credit Unions Report

By April 8, 2024News

Commenting on the ‘Financial Conditions of Credit Unions’ report, published by the Central Bank this morning, Kevin Johnson, CEO of CUDA (Credit Union Development Association) said “This morning’s report shows that lending is strong across the credit union sector, with a 12pc increase in loans for the financial year ended 30 September 2023. Loan growth has continued into 2024 and this is reflective of the huge demand for credit union loans and the increased ability of credit unions to meet this demand across multiple channels. Furthermore, thanks to legislative changes signed last February, we expect the scale of credit union lending to significantly increase in the coming months and years – because from September 2024, for the first time, credit unions will be able to offer a service or product such as a home loan to a member of another credit union – under a formal arrangement with that other credit union. For householders and aspiring homeowners, this means there will be greater access to fairer mortgages as credit unions will be able to refer mortgage applications to other credit unions should they not be in a position to provide a mortgage themselves. This effectively means that every credit union in the country will be able to offer mortgages. As a result of these changes, CUDA contends that total new credit union mortgage lending could reach €1 billion per annum by 2027, which could put credit unions in the top five mortgage lenders.

Furthermore, the Credit Union Regulatory Lending Framework review is ongoing in the Central Bank at present and is due to be published by the end of June. On foot of this review, we would hope going forward that further changes will be implemented which will permit credit unions to lend more.

While after falling to a seven-year low the last time this report was published[1], the slight increase in arrears captured in this morning’s report is a sombre reminder of the pressure that the increased cost of living has brought on people. Credit unions are very cognisant of this and continue to remain supportive of anyone who is experiencing difficulties.  We believe the low increase is testament to the competitive interest rates available from credit unions as well as the work that credit unions do with any customers who may run into difficulties repaying their loans.

This morning’s report also shows that there’s been an increase in reserves across the sector, with all credit unions reporting regulatory reserves that are comfortably above the required regulatory minimum. This is evidence of prudent financial management by credit unions – which in turn underpins member confidence and enables credit unions to expand on their service offerings and continue to win more of the mortgage and lending pie from the Irish banks and non-banks alike.”




[1] As per Financial Stability Report for financial year to 30 September 2022, published in March 2023