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Credit union mortgage lending rules may be loosened

Credit union mortgage lending rules may be loosened

The Central Bank is preparing to loosen restrictions on credit unions providing home loans, almost a year after the Oireachtas finance committee called for a review of lending limits amid concerns about the viability of the sector.

Ed Sibley, a deputy governor with the Central Bank, said at an event in Trinity College Dublin that credit unions “have significant headroom” for mortgage lending, relative to limits.

However, he added: “Shortly, we will be consulting on ways to allow them loosen that.”

The regulatory authority told credit unions on Thursday that a consultation paper on its proposed changes to the framework will be published “within the coming weeks”, adding that it was “encouraged” by the level of feedback from credit unions during a pre-consultation period on the matter.

The small number of credit unions that have moved into the mortgage market in recent times are bound by a general ban on firms in the sector having more than 15 per cent of their loans at more 10 years to final payment.