A core objective of the legislative and regulatory framework for Credit Unions in Ireland is to ensure the safety and soundness of credit unions. This requires prudent lending and investment decisions by Boards of credit unions to safeguard members' savings. The restrictions contained in Section 35 of the Credit Union Act 1997, as amended, are an important asset and liability tool for credit unions as the funding of credit unions is predominantly provided on a short term basis in the form of on-demand savings and consequently the limits on longer term-term lending are necessary.
I am aware that credit unions are seeking to facilitate revised repayment instalments for credit union members currently experiencing difficulty in meeting loan repayments due to unfavourable changes in their financial circumstances but that these endeavours, in certain circumstances, run up against the current Section 35 limits on longer-term lending for some credit unions. Subject to the over-arching considerations that the financial position of a credit union, the security of members' savings and accurate reporting of the financial status of a credit union is maintained, it should be possible to explore all reasonable steps to allow a member, in carefully monitored and controlled circumstances, to re-schedule their repayments to a level which is affordable to them. Of course, each credit union must fully and properly recognise arrears situations where they exist, and where members are in difficulty the process of facilitating them must be transparent to board members and regulators so that a credit union is never in doubt as to its own position.
My Department has, at my request, reactivated the Group, representative of stakeholders, the Regulatory Authority and my Department, which successfully reviewed the Section 35 lending limits in 2006. The mandate for this Group is to find a solution to this issue. My officials have consulted with the relevant stakeholders and have received proposals from them on how we might best proceed. This work is being brought forward with a view to reaching agreement on this issue as soon as possible.