Skip to main content
Tag

credit unions

CUDA Comments on the Central Bank of Ireland’s Public Consultation on Proposed Lending Limit Changes

By News

Commenting on the Central Bank of Ireland’s public consultation regarding significant changes to lending limits and underwriting requirements following the enactment of the Credit Union (Amendment) Act 2023, Kevin Johnson, CEO of the Credit Union Development Association (CUDA), said:

“we are pleased that this modernising of the lending framework regulations for credit unions is in line with our request submitted to the Central Bank of Ireland in February ’24.

The Credit Union (Amendment) Act 2023 was designed to give credit unions greater flexibility, enabling them to engage in loan participation and syndication, which allows lending risks to be shared among credit unions. The combination of the legislation and these proposed regulatory changes mark a major step forward for the sector, empowering credit unions to enhance their offerings in both the mortgage and business lending markets. A significant move towards our vision where everyone in Ireland will have access to all Credit Union services​.

Credit unions have already begun to account for a growing share of mortgage switches. With these enhanced lending limits, more credit unions will be attracted to helping members finance their home purchase and collectively the sector is  poised to more than triple their current mortgage loan books to over €2 billion in the coming years, further establishing themselves as strong contenders in the Irish mortgage market.

In 2017, the average credit union mortgage was approximately €110,000. Today, that figure has risen to over €200,000, though it remains below the banking sector average, which exceeds €300,000. Credit unions cater to a broader range of applicants, as reflected in the average household income of their mortgage holders, which is around €75,000—significantly lower than the €100,000 average for bank mortgage customers.

Business lending has also seen considerable growth across the sector, supported by the recruitment of specialists in this area. These enhanced lending limits and positive adjustments to underwriting requirements will enable credit unions to compete more intensively for business loans within their local communities.

Under the new legislation, credit unions will also be permitted to collaborate with one another to offer services such as home loans to members of other credit unions. For the first time, credit unions will have the ability to refer mortgage or business loan applications to other credit unions when they are unable to provide the loan themselves. This effectively means that every credit union in the country will be able to offer mortgages—a significant milestone for the sector.

The appetite for credit union mortgages continues to grow among the public, reflecting a clear demand for alternatives to traditional banks. Credit unions are stepping up to meet this demand by upskilling, modernising their offerings, and bringing much-needed competition to the market. For several years, regulators have encouraged credit unions to expand their lending, and the sector’s efforts are now bearing fruit.

The success of credit union mortgage lending was recently acknowledged by Sharon Donnery, Deputy Governor of the Central Bank of Ireland, who stated: ‘Over the years since these lending regulations were introduced, I am happy to say that our supervisory experience tells us that many credit unions in the sector have built this capacity, and they have prudently engaged in business and mortgage lending. 11% of Credit Union loan books are now in mortgages.’

Credit unions are uniquely positioned to drive competition and provide real alternatives in Ireland’s financial services market. These proposed changes will help credit unions continue their phenomenal growth in lending, further cementing their role as key players in the Irish financial landscape.”

ENDS

 

CUDA Urges Political Parties to Abolish DIRT on Savings Below €10,000 to Promote Financial Resilience

By News

As Ireland approaches the general election on November 29th, 2024, the Credit Union Development Association (CUDA) is calling on political parties to commit to abolishing Deposit Interest Retention Tax (DIRT) on all savings below €10,000. CUDA argues that this change would encourage a culture of saving, particularly among low- and middle-income households, and align with government goals of promoting financial responsibility and reducing reliance on debt.

Speaking ahead of the election, Kevin Johnson, CEO of CUDA, said:
“Removing DIRT on modest savings balances is a simple yet effective policy to incentivise saving and help people build financial resilience. For many low- and middle-income households, this could mean the difference between relying on high-cost credit during emergencies or having a financial safety net in place.”

Encouraging a Savings Culture

Credit unions, which play a vital role in fostering financial responsibility, offer competitive savings rates that already benefit communities across Ireland. And while there has been much talk about the savings offerings from some overseas providers, many Irish credit unions offer strong rates on deposit savings..  Dividend payments are also on the increase with many credit unions expected to declare higher rates at their AGMs in December and January.

Removing DIRT on savings below €10,000 would amplify these benefits, particularly for low- and middle-income earners.

CUDA estimates the cost to the Exchequer to abolish DIRT on modest savings would be approximately €18 million annually, based on current deposit levels. However, this cost would be outweighed by the societal benefits of a stronger savings culture, reduced reliance on state supports during financial crises, and the promotion of long-term financial stability for households.

A National Need for Financial Resilience

As interest rates have risen, Irish savers are finally beginning to see better returns on their deposits. However, the 33% DIRT tax disproportionately impacts those with smaller savings, making it harder for them to accumulate wealth or build financial security.

“Low- and middle-income savers are penalised for their prudence under the current system and we are very cognisant of the high number of people who do not have an emergency or ‘rainy day’ fund,” said Johnson.
“By abolishing DIRT on savings below €10,000, the government can help these households build financial stability while encouraging others to begin saving. It’s a practical solution that supports the national goal of fostering financial responsibility and reducing reliance on debt.”

A Broader Economic Impact

CUDA’s proposal aligns with ongoing efforts to boost financial literacy and savings habits nationwide. Recent government data highlights a rise in savers benefiting from energy efficiency grants and other schemes, underscoring the public’s willingness to save when incentivised.

Additionally, as credit unions continue to provide competitive deposit offerings, abolishing DIRT would help them play an even greater role in supporting their members’ financial wellbeing. This initiative would not only assist individual households but also contribute to Ireland’s broader economic resilience.

A Call to Action for Political Parties

CUDA is urging all political parties to prioritise the abolition of DIRT on savings below €10,000 as part of their election manifestos and commit to its implementation in the next Dáil.

Kevin Johnson concluded:
“The benefits of this proposal are clear. It would encourage prudent financial behaviour, reduce reliance on debt, and promote economic resilience, particularly for those on low and middle incomes. As we approach the general election, we hope all political parties will recognise the value of this initiative and support its inclusion in their plans for government.”

 

A full copy of the CUDA General Election Manifesto is available here.

ENDS

Notes to Editors:

  • Deposit Interest Retention Tax (DIRT) is currently charged at a rate of 33% on all interest earned on deposits.
  • Credit Union Development Association (CUDA) represents progressive credit unions across Ireland, supporting them with a strong voice, leadership, and practical solutions that enhance their strategic and operational capabilities.

 

Credit Unions Welcome Deputy Governor’s Positive Remarks and Anticipate Upcoming Regulatory Changes

By News

CUDA warmly welcomes the positive comments made by Deputy Governor Sharon Donnery in her recent speech, “Evolving with the times, credit unions in a changing landscape.” Her recognition of the significant progress made by credit unions over the past decade, particularly in terms of asset growth, diversification of services, and strengthened governance, is greatly appreciated.

Reflecting on the speech, Kevin Johnson, CEO CUDA stated “We would like to extend our thanks to the CBI Deputy Governor Sharon Donnery for acknowledging that “many credit unions in the sector have built this capacity, and they have prudently engaged in business and mortgage lending.

This recognition is a testament to the hard work and dedication of credit unions. He added “we firmly believe that the existence of the SAM platform for mortgages and business lending, along with their related support services, has played a significant role in this achievement. The SAM platform has provided the necessary tools and resources to help credit unions expand their lending capabilities and better serve their members.”

“We are particularly encouraged by the Deputy Governor’s announcement of planned changes to the concentration limits and underwriting requirements. These changes, aimed at enabling increased lending activity, represent a significant opportunity for credit unions to further support their members and communities.”

The proposed regulatory adjustments will be subject to a public consultation in early December. CUDA looks forward to actively participating in this consultation process and making a comprehensive submission on behalf of our member credit unions. Our goal is to ensure that the final regulations support the sustainable growth and development of the sector, allowing credit unions to better serve our members’ needs.

We thank Deputy Governor Donnery for her continued support and wish her every success in her new role at the ECB, and we look forward to working closely with the team in the Registry of Credit Unions to implement these important changes.

20% Increase in Consumers using Credit Union Services

By News

Following the publication by the  Department of Finance of the Consumer Sentiment Banking Survey Report today, Kevin Johnson, CUDA CEO said “We are delighted to see a 20% increase in the number of consumers using the services of credit unions (up from 30% in 2023 to 36% in 2024). With the widespread rollout of digital services across the sector and the increase of new products from current accounts to mortgage and business loans, this significant increase in consumers accessing our services isn’t that surprising.  

Furthermore, given the changes in the pipeline, we expect the numbers using credit unions to increase even more. This autumn for example will see Irish credit unions become an even stronger contender in the Irish mortgage market. Thanks to legislative changes signed last February, in the last three months of this year, every credit union in the country will be able to offer 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. As this will be the first time ever that credit unions will be able to do so, this will be a watershed moment for credit unions and one that will see them eat into more of the banks’ market share in the coming years.   

Credit unions will also be able to refer applications for other products to another credit union – such as business loans, current accounts and debit cards. Credit unions will essentially be able to partner with other credit unions to offer their members a wider selection of products. 

Ultimately, it will be consumers who will be winners if credit unions can eat into more of the banks’ mortgage pie – and indeed if more credit unions are used by consumers for their day-to-day financial services. Credit unions are member-owned financial institutions, so each credit union is essentially owned by consumers, with consumers at the heart of the decisions made by these organisations. This is one of the reasons credit unions can be relied on to provide affordable financial services to their members, with any surpluses reinvested to benefit their members.”

Kevin Johnson, CEO of the Credit Union Development Association (CUDA)

Chief Executive Officer, Credit Union Development Association (CUDA)

By Uncategorized

 

Incorporated in 2003, CUDA is a forward-looking development association representing and serving 50 progressive Credit Unions in Ireland with a strong voice, leadership and the provision of value-creating solutions.  CUDA plays a significant role in advocacy and policy development for its membership, and for the sector overall.  In addition, CUDA solutions and services enhance the strategic effectiveness and operational capabilities of member Credit Unions.  CUDA’s experienced team operates with a sense of purpose and a clear vision to improve the financial, social and environmental well-being of credit union members and of the communities they serve.

For further information on CUDA, please visit:  Credit Union Development Association (CUDA)

The Role

This is an exciting opportunity for a proven, inspiring leader to contribute to CUDA’s next phase of development and change.  Reporting to the Management Committee, the CEO will provide vision, strategic leadership and effective management across all functions of CUDA to ensure it achieves its overall aims and purpose regarding advocacy & policy development and the provision of business solutions to its members.  Working at all times to the highest level of governance and integrity, the CEO will engage strategically with senior decision-makers and stakeholders, including Government Departments and the Central Bank, to ensure that the evolving needs of member Credit Unions are addressed.  This position will require significant networking and involvement in the public domain and on national media, regarding a diversity of matters within the sphere of influence and of relevance to CUDA.

The Person

This position requires an inspirational and dynamic leader with an outstanding track record of achievement within a relevant organisation.  With a comprehensive understanding of the opportunities and challenges within the Credit Union sector, the appointed person will have the capacity and commitment to build on CUDA’s achievements to date.  They will oversee the continued development and implementation of CUDA’s Strategy through a dynamic working relationship with the Management Committee of CUDA, the National Council, member Credit Unions, the CUDA Team and all other relevant stakeholders.  Possessing a relevant degree or other professional qualification, the appointed candidate will have exceptional stakeholder management abilities in addition to exemplary interpersonal and communication skills.

To apply, please email a CV and supporting letter to: Luke.Freeley@Lansdownesearch.ie

Closing date for receipt of applications is 12:00 Noon on Thursday, August 15th, 2024.

For a confidential discussion, please contact Luke Freeley, Partner, Lansdowne Executive Search, at +353 (0)87 240 4889.

Candidates for this role will be sourced through both advertising and executive search processes.

In line with its Diversity, Equality and Inclusion policy, CUDA is seeking a balanced pool of candidates.

CUDA welcomes the publication of the ICURN report

By News

CUDA welcomes the publication of this awaited ICURN peer review report. It contains several key recommendations which the Regulators Network believes will improve the effectiveness of compliance within credit unions. We note that the report considers the financial performance of credit unions up to year-end 2022, and therefore does not have the benefit of the improvements achieved in 2023.

From our initial read of the report, we welcome suggestions calling for the CBI to update aspects of the Credit Union Handbook related to operational risk, fraud reporting requirements, and increase engagement with credit union boards and staff on risk management practices.

We particularly welcome the suggestion for further development of the Regulatory Framework to accommodate the growing diversification of credit union business lines, provided credit unions demonstrate the necessary capability and competence. This involves acknowledging and supporting the expanding roles and services offered by credit unions while ensuring they remain within a safe and sound operational framework.

The report notes that the CBI “remain of the view that there is no rationale to change to a risk weighted approach” for determination of capital which is disappointing and this ties up excessive capital. That said we look forward to working with the CBI on their ongoing lending framework review and the associated liquidity regulations. CUDA maintains that a ‘One size fits all’ regulation approach damages both large and small Credit Unions, a new model is required for the sector to sustain and achieve its full potential.

CUDA comments on CBI Financial Conditions of Credit Unions Report

By News

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.”

 

ENDS

 

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

CUDA welcomes the passing of the Credit Union (Amendment) Bill at Committee Stage

By News

Mortgage volumes to double each year and SME services to be available across the sector

Commenting as the Credit Union (Amendment) Bill passed at Committee Stage, Kevin Johnson, CEO of CUDA which works with 50 credit unions, said

”At a time when there is a significant housing challenge, a climate change crisis, a looming pension crisis and large-scale bank branch closures, CUDA believes that the Credit Union (Amendment) Bill will immediately deliver increased finance options for individuals, small businesses and for community organisations.

The new proposals will facilitate real collaboration between credit unions. Each credit union is a separate legal entity with its own board and management team, and up to now, they are not permitted to share business. These changes will permit credit unions to collaborate, introduce loans to each other and collectively share loans. They will be able to establish a credit union for credit unions and have greater opportunity to invest in credit union owned service organisations. These changes will help credit unions make a greater financial, social, and environmental contribution as their legislation framework is modernised.

For householders and aspiring homeowners, 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 it themselves. This effectively means that every credit union in the country will be able to offer mortgages. Credit unions will process approximately €200m in mortgages in 2023. Following the enactment of this legislation, we anticipate this volume doubling each year for the next couple of years. While the average mortgage interest rate across banks has increased significantly, it has actually decreased across the credit union sector.

For local community organisations seeking larger loans, there will be more access to affordable finance options as their local credit union will be allowed to co-lend and share loans with other credit unions.

For small business owners, it will be a lot easier for the business itself to qualify to become a member of a credit union and therefore access the ever-increasing range of products and high-quality award-winning personal service.

For all credit union members, the changes will allow greater digitalisation of activities to complement the renowned face-to-face personal service.

For the credit unions themselves, they will be able to invest in shared services and establish credit unions for credit unions – this will help provide maximum efficiency for their members by sharing costs and expertise.

Allowing credit unions to do more business through these changes, could effectively see their lending double, increasing to over €10bn.

We extend our sincere appreciation to both Minister Jennifer Carroll-MacNeill and her predecessor Minister Sean Fleming for their invaluable support and significant contributions in helping advance the credit union mission”.

Amendments to Credit Union legislation

Supporting investment in collaboration

Enhanced collaboration is central to the future of the credit union movement

  1. Proposal to recognise Credit Union Service Organisations (CUSOs) in the Credit Union Act as authorised investments;
  2. Proposal to introduce Corporate Credit Unions as entities through which credit unions can further collaborate.

Improving members services

Enhancing the Common Bond to ensure members can access the fullest range of services

  1. Proposal on the referral of members to allow for the introduction of members to other credit unions to access other services/products;
  2. Proposal to allow credit unions to engage in loan participation lending;
  3. Proposal to allow for credit unions to lend directly to certain classes of public bodies;
  4. Proposal to ensure that clubs, societies, and companies based in a common bond are members;
  5. Proposal to make an annual report available to members electronically, e.g. via the credit union website;
  6. Proposal that every credit union publish a digital map or provide a description of their common bond on their website and in their annual report,

Supporting improvements in Governance

Enhanced governance to enable boards to focus less on operational matters and more on strategy and business models.

  1. Proposal to enhance the role of the CEO in relation to the board by allowing flexibility to add the CEO as a board member;
  2. Proposal to amend the minimum number of board meetings from ten to six;
  3. Proposal to allow greater flexibility in requirements to review policies from an annual basis to every three years;
  4. Proposal to allow the Board to delegate loan rejection appeals to the executive team;
  5. Proposal to amend the language in legislation related to the responsibility for approving loans and membership – this will facilitate the use of modern technologies.

CUDA comments on the CBI Report on Financial Conditions of Credit Unions

By News

The Central Bank of Ireland have today (30th March 2023) published its ninth edition of the Financial Conditions of Credit Unions Report.

Commenting on the Central Bank’s report on the Financial Conditions of the Credit Union sector, ‘Kevin Johnson, CEO of the Credit Union Development Association, which works with over 50 credit unions, said

“Loan volumes are up, and the loan-to-asset ratio is definitely improving, but not by as much or as quickly as we would like. We believe that there’s an absolute need to resolve this by expanding the loan profile of credit unions and prudently growing loan books across the sector.  

Competition in the mortgage market has reduced following the departures of Ulster Bank and KBC, and with the non-banks struggling to offer competitively priced products, there’s a clear opening for credit unions to substantially expand their mortgage products. CUDA has been at the forefront of this, with its members initially entering the mortgage market in 2018 targeting specific lending needs, since 2021 we have worked with credit unions to expand their offerings and we are now working to expand this to more credit unions. 

New legislation that is progressing through the Oireachtas and scheduled for enactment this year will support this, as it will allow credit unions to refer lending business to each other which means that even those credit unions without mortgage lending underwriting skills will be able to facilitate their members. 

Each credit union is a separate legal entity with its own Board and management team, and they are not currently permitted to share business. These changes will help credit unions make a greater financial, social, and environmental contribution as their legislation framework is modernised.

Credit Unions have significantly modernised in the past decade – their structure, legal and regulatory status, product offerings, and service delivery methods have advanced considerably. In particular their digital capabilities were accelerated during the Covid-19 pandemic. Members can still access the traditional set of personal loans and savings, and now they can also avail of current accounts, ‘one stop shop’ retrofit loans, mortgages, revolving credit, debit cards, community loans, agricultural loans, as well as loans for small businesses.  These are accessible face to face, over the phone or via online facilities.  Recent rises in interest rates will have a significantly positive impact on the ROA for all credit unions as this will result in them getting a better return on their investments.”

CUDA welcomes the New Minister of State with responsibility for Financial Services, Credit Unions and Insurance

By News, Uncategorized

Credit unions have welcomed the appointment of Jennifer Carroll MacNeill as the new Minister of State at the Department of Finance with responsibility for Financial Services, Credit Unions and Insurance.

Commenting on the appointment, Kevin Johnson, CEO of CUDA,

We welcome the appointment of Minister Carroll MacNeill at this key time for credit unions.  We look forward to working closely with the new Minister on the Credit Union (Amendment) Bill 2022 as it progresses though the stages to enactment.  For many years credit unions have operated within outdated legislation – legislation that is not fit for purpose in this modern era. It is so important now that we ensure the final drafting is appropriate to avail of this unique opportunity that will facilitate credit unions to offer and deliver more products and services to existing and future credit union members.  At a time when our society faces many challenges, this critical element of the Programme for Government will undoubtedly contribute to strengthening the standard of living for so many people, both at local and national level