Dáil Éireann Debate, Wednesday - 2 March 2022
88. Deputy Mairéad Farrell asked the Minister for Finance when he will be making the regulatory changes to enable credit unions to significantly increase their footprint in the mortgage market and honour the commitment in the Programme for Government for credit unions to become a key provider of community banking further to an article (details supplied); and if he will make a statement on the matter. [12030/22]
View answer89. Deputy Holly Cairns asked the Minister for Finance the steps he is taking to make the necessary regulatory changes to enable credit unions to significantly increase their footprint in the mortgage market; and if he will make a statement on the matter. [12156/22]
View answerI propose to take Questions Nos. 88 and 89 together.
This Government recognises the importance of credit unions.
The Programme for Government contains commitments to;
- Review the policy framework within which Credit Unions operate.
- Enable and support the Credit Union movement to grow.
- Support Credit Unions in the expansion of services, to encourage community development.
Credit unions can and do provide mortgages, with over half the sector engaging in mortgage lending at some level. As at December 2021 credit unions had a mortgage book of approximately €280 million, which had grown 23% year-on-year.
The level of mortgage lending undertaken by individual credit unions varies. 20 credit unions account for approximately 76 per cent of all new house loans in the sector with 50 credit unions accounting for 98 per cent of the sector total.
Since 1 January 2020, credit unions now have a combined capacity to provide up to €1.1 billion in additional SME and mortgage loans, with further capacity of up to 15% available to credit unions on approval by the Central Bank.
4 credit unions are currently approved for the 15% combined lending limit with 1 additional application to the Central Bank currently in progress. Up to 66 credit unions could apply for this 15% limit and it is the Government’s hope that more will continue to do so.
In regard to fulfilling the commitments in the Programme for Government for credit unions, the Review of Policy Framework is in its final stages with a summary list of proposals having recently been shared with all the credit union representative bodies. A final stakeholder engagement session has been scheduled for early March. Legislative proposals arising will go to Cabinet shortly thereafter. The proposals being considered should assist credit unions to invest in collaborative ventures, which could also be used to expand their mortgage offering.
