Credit unions will be able to refer their members to other credit unions to access a service, regardless of whether or not the referring credit union provides the service itself, under an amendment to proposed legislation currently before the Oireachtas.
Credit unions will also be able to take part in loan participation and loan syndication under another amendment to the Credit Union (Amendment) Bill 2022.
The draft laws, which aim to significantly reform the credit union sector, passed the committee stage this afternoon and the Minister of State for Financial Services, Jennifer Carroll MacNeill.
She said she expects it to clear all stages and be ready for signing into law by the end of the year.
Another amendment will tighten the process for customers nominating who receives the funds in their account on their death, by requiring two signatures from non-beneficiaries.
A further amendment will make changes to the rules around public access to the members list.
All credit unions will also have to have an Environmental, Social and Governance policy.
In total, 56 amendments have been brought since the bill was first published in December.
The movement of the Bill on to report stage has been welcomed by the minister.
She said the new legislation, which has been in development for three years, would help credit unions to reach their potential.
"It is important that credit unions can continue to develop their lending capabilities in the community in a safe and cost-effective way through collaboration," Ms Carroll MacNeill said.
"I believe all credit union members, irrespective of where they live, should have access to the full service of community banking."
The bill increases flexibility around the common bond, which limits customers access to services to those provided by a credit union near to where they live or the employer they work for.
Credit unions will also be able to collaborate so that they can compete in the mortgage and SME lending markets.
Currently 75 credit unions are part of a Credit Union Service Organisation which is planning to roll out a standardised mortgage product offering next year.
In the last two years, mortgage lending by credit unions has increased 70%, although they still only account for 7% of total mortgage lending.
The bill also allows the formation of corporate credit unions, where the credit union's members are other credit unions.
Currently there are around 200 credit unions active in the State, which collectively have around 400 branches, 3.5 million members and hold almost €17bn in savings and €6bn in loans.
