Over half of Ireland's credit unions have had lending restrictions imposed on them in the aftermath of a property crash that has left the Government with a bill of up to €1 billion to recapitalise them.
"More than half of them have had restrictions put on them. We have a major issue with the registrar on this issue but as far as we are concerned we have no credit unions in present who are in financial difficulties," the Irish League of Credit Unions' chief executive Kieron Brennan said on RTE radio today.
Some credit unions lent aggressively during the property bubble and have been saddled with large arrears.
"The difficulty that we have is that the restrictions are preventing some credit unions from lending to perfectly good customers. The restrictions are not just applied in terms of an amount the credit unions can lend per month but also in terms of loan amounts you can give to an individual,'' Mr Brennan said.
Finance Minister Michael Noonan told the Seanad yesterday that the Government would spend between €500m and €1 billion recapitalising the credit union sector.
He said that legislation would be in place before the year end to help effect the restructuring of the credit union, agreed as part of an EU-IMF bailout.
Mr Brennan said the changes would not mean the demise of the local credit union.
"We are looking at a restructuring but I want to give reassurances that local credit unions will remain in place regardless of what the overall structure looks at the moment,'' he said.
