Landmark regulatory changes coming in during 2025 will mean every credit union in the country will be able to offer mortgages, business loans, current accounts and debit cards.
The changes are coming about due to the enactment of the Credit Union (Amendment) Act 2023, a piece of legislation that is set to transform the sector, according to Helen Carbery, the new chief executive of the Credit Union Development Association (CUDA), a representative body for the lenders.
She said: “We are at a landmark moment in the evolution of the role and value of the credit union sector in Ireland.”
The regulatory changes for credit unions coming in under the Credit Union (Amendment) Act 2023 was one of the most important pieces of credit union legislation to ever be developed, she said.
It will transform the whole credit union landscape, she added.
“It is thanks to this new legislation that for the first time ever, all credit unions will be able to offer a service or product such as a mortgage to a member of another credit union, under a formal arrangement with that other credit union.”
This effectively means that every credit union in the country will be able to offer mortgages, business loans, current accounts and debit cards.
Ms Carbery said smaller credit unions will be able to offer these services by essentially partnering with other credit unions or through credit union shared organisations.
“Importantly, the legislation enables credit unions to maintain their independence and uniqueness while they partner with others to provide the services needed by their members,” she said.
The act also modernises governance structures and reduces operational burdens on volunteer boards to enable credit unions to play a more active role in areas such as housing, SME lending, and environmental sustainability. The Credit Union (Amendment) Act 2023 also introduces the concept of the corporate credit union.
Often described as a central credit union or “a credit union for credit unions”, a corporate credit union would support collaboration between credit unions, and enable them to better manage their resources and expand their lending capabilities, she said.
Ireland is not alone in grappling with how to regulate a diverse credit union sector. In countries such as Canada and Australia, regulatory systems have successfully enabled credit unions to thrive while ensuring appropriate oversight, Ms Carbery said.
The next phase of the implementation of the Credit Union (Amendment) Act 2023 includes the drafting of new regulations for the development and operation of a corporate credit union by the Central Bank of Ireland.
This will be done in consultation with the credit union sector.
“This is a very exciting development in the year ahead as it could pave the way for credit unions to gain greater access to funding and more opportunities to expand their offerings.”
Ms Carbery has just taken over as head of CUDA following the retirement of Dr Kevin Johnson from the role.
In her recent speech at the Credit Union Annual Conference in Killarney, the outgoing deputy governor of the Central Bank, Sharon Donnery, said the focus should allow it to seize the opportunities that the various credit union regulations have presented.
Ms Donnery said that since 2014, the number of credit unions overall has halved and the number of large credit union has more than doubled. Total assets in the sector have grown by 50pc from €14bn in 2014 to just over €21bn in 2024.
She said credit union reserves have strengthened over the last decade and total loans have grown by 73pc in the same period.
Ms Carbery said to increase their loan book, the credit sector is focused on how to remain relevant to their communities with useful and attractive offerings.