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Central Bank plans new rules for Credit Unions

Credit Unions will have tighter restrictions on savings and lending under the proposed rules
Credit Unions will have tighter restrictions on savings and lending under the proposed rules

Credit Unions will be forced to reduce the amount their customers can save under new regulatory proposals from the Central Bank.

A consultation paper from the financial authority proposes a €100,000 cap on members’ savings – half the amount currently permitted.

Credit Unions will also have to maintain borrowing at 25% of their total aggregate savings under the new rules – down from the current threshold of 50%.

New restrictions would also be put on lending under the rules, including a maximum maturity of 25 years and limitations on the types of loans that can be given out.

The Central Bank’s Registrar of Credit Unions Anne-Marie McKiernan said the new regulations would help “foster a safer, stronger credit union sector”.

The authority will now hold a number of consultation meetings in order to gather feedback from the public on the proposed measures, details of which are published on its website.