Noonan: no objection in principle to credit union mortgages

Minister for Finance Michael Noonan has said he has no objection "as a matter of principle" to larger credit unions providing mortgages.

“I need assurances that individual credit unions are capable of long-term lending funded by short-term deposits and that the savings of members are always secure,” he added.

He said credit unions could currently provide mortgages to members within certain maturity limits.

They could lend up to 30 per cent of their loan book over five years and up to 10 per cent over 10 years, subject to a maximum maturity of 25 years, he said.

First-time TD Carol Nolan: the Government not working effectively

---

Tesco underestimated ‘spirit of solidarity,’ Dáil hears

---

Water charges Q&A: Will I get my money back?

---

Fine Gael is in Government but Fianna Fáil is in power

---

In addition, credit unions could apply to the Central Bank for an extension to their longer-term lending limits of up to 40 per cent of their loan book over five years and up to 15 per cent over 10 years, said Mr Noonan.

Investment

The Minister was replying in the Dáil to Fianna Fáil finance spokesman Michael McGrath, who said the Central Bank had no interest in assisting credit unions in getting into the mortgage market in any significant way.

Mr McGrath said the reality was there would have to be investment, underwriting and expertise provided to enable credit unions get involved.

“A certain amount can be done on a shared basis across the sector, but the current restrictions, which are a matter for the Minister and not just the Central Bank, are preventing them from doing that,” he added.

“We need competition in the mortgage market, and credit unions offer the potential for that.”

Mr Noonan said his role was to ensure the legal framework for credit unions was appropriate for the effective operation and supervision of credit unions.

The Registrar of Credit Unions at the Central Bank was the independent regulator for credit unions, he added.