A group of 25 credit unions have come together to set up a credit union services organisation (Cuso) as a first step towards establishing a single body to manage treasury functions for members, with a view to boosting mortgage and business lending.
The boards of the 25 credit unions have appointed banking veteran John Webb who has previously worked in senior treasury and risk management roles, as acting chief executive, the group said in a statement.
The 25 credit unions have almost €9 billion of assets between them – accounting for about 40 per cent of the total sector. Other credit unions are expected to join the Cuso in time.
Laws introduced in 2023 to help develop credit unions introduced the concept of a corporate credit union (CCU) – a credit union for credit unions – to support collaboration and pool certain resources. However, it is expected to be late next year before the Central Bank outlines the regulations required for CCUs for this section of the legislation to begin.
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In the meantime, the Cuso will seek to improve standards of asset and liability management among members with a view to being ready when they are allowed to come together to form a CCU.
The steering group of the project said the Cuso will begin a roll-out of a standardised asset and liability management framework, developed specifically for credit unions, from next month. The group is being supported by the Irish League of Credit Unions and Credit Union Development Association.
“It’s not a cast in stone asset liability framework. It will evolve as we take on more credit unions,” said Webb, who previously worked as treasurer in Ulster Bank Ireland and in risk and treasury management at AIB.
The project to set up a Cuso has been led by five credit unions – St Raphael’s Garda Credit Union, Member First Credit Union, Health Services Staff Credit Union, First Tech Credit Union, and Comhar Linn INTO Credit Union.
Comhar Linn INTO Credit Union is also in merger talks with two fellow teacher credit unions, TUI Credit Union and Education Credit Union.
[ Three teacher credit unions eye merger to form State’s seventh-largest playerOpens in new window ]
“It’s taken almost three years to get to this stage,” said Claire Byrne, chief executive of St Raphael’s and one of the driving forces behind the project, adding that it could be a further three years before the CCU is up and running.
Last year, the Central Bank gave the credit union movement additional lending flexibility, which, it estimates, would treble the sector’s capacity for mortgage and business lending to about €9.9 billion.
Effective from last September, credit unions, regardless of size, can lend up to the equivalent of 30 per cent of their total assets by way of home mortgages. Business lending can reach as much as 15 per cent of assets.
