Limits Placed on Credit Union Loans

The Credit Union Managers Association says that credit unions in Ireland are receiving letters from the Central Bank informing them that their lending is to be restricted.

The new rules mean some credit unions are only allowed lend a maximum of €100,000 to customers in any one month. Restrictions are also being placed on the maximum loan amount a credit union is allowed to give to a single  customer.

Taoiseach Enda Kenny has defended the decision by regulators to restrict lending. He said the Central Bank was acting in the best interest of the three million members of credit unions. The priority, he said , was to protect the savings of members in credit unions around the country.

The lending restrictions are not applied to all Credit Unions – and the limits vary  from one credit union to another. Some of the restrictions are based on the total amount that can be given out in any one month, with others limiting the amount which can be loaned to any one member.

Some credit unions have been told that they can have no more than €5,000 loaned out to each member at any time.