ILCU Response to Central Bank's Feedback Statement on CP 125

Posted on: 21 Nov 2019

The ILCU today notes the publication by the Central Bank of Ireland of the Feedback Statement Statement on CP125 - Consultation on Potential Changes to the Lending Framework for Credit Unions. The ILCU, on behalf of its affiliated credit unions, has long campaigned for a review of the long-term lending limits imposed on the credit union movement. These limits restricted our ability to meet the borrowing requirements of credit union members.
Albeit that the amendments set out in today’s statement remain conservative in their scope, the ILCU nonetheless welcomes the Central Bank’s decision to remove the existing limits, and to recognise the evolving lending model of the credit union movement. There has been significant appetite from our affiliated credit unions, and indeed credit union members, for larger and longer term loans. Today’s move will enable credit unions to expand their longer-term lending offering - on a prudent and managed basis.
The new regulations will allow credit unions to become more significant players in the residential mortgage market through CU Home, the ILCU’s new standardised, residential mortgage solution. Credit unions should be granted still more leeway to serve this market, and so while today’s amendments are welcome, they do not fully enable us to develop diversified loan portfolios at the required scale. 
However, we acknowledge that the amended regulations are a positive step in the right direction. We will continue to engage with the Central Bank with a view to a further increase in the limits in the future.