Some credit unions may not be viable on a stand-alone basis in the future, the Registrar of Credit Unions has told an Oireachtas Committee today.
James O'Brien said he does not have powers to direct and fund any one union into a more viable entity, so winding up a union is the only option available at present.
He also revealed at the Economic Regulatory Affairs committee that some credit unions have had to give a lot of their members more time to repay loans.
James O'Brien said there had been significant amounts of what are termed 'rescheduled loans' in recent years. As a result, new rules are being imposed on all credit unions, to put aside more money in case more loans are not repaid.
He said the stresses caused by loans not being repaid on time had increased quite dramatically. He said individual credit unions will have to put aside, as a reserve, 10% of the value of all loans.
At present 85% of credit unions had put aside 7.5%, while a significant number had already achieved the 10% level.
Mr O'Brien said these preventative measures, of building up credit union reserves in case more loans are not repaid, were to ensure they did not go the way of the banks.
Mr O'Brien said that arrears on loan repayments to credit unions had doubled in the last couple of years.
And, he said, a small number of credit unions were experiencing solvency issues.
He said about 13.5% of loans - or one in every eight loans - were in arrears for longer than ten weeks. That level of arrears had to be compared with the level a about 6% a couple of years ago, he added.
Jonathan McMahon, from the Central Bank, told the committee that there are 20 credit unions with serious solvency issues. He said it was likely that there were serious problems in the credit union sector.