DUBLIN—Ireland’s credit unions are exploring a plan under which €4-billion would be made available to finance mortgages in this country, an amount that the Independent described as enough to put “put banks under serious competitive pressure.”
But the new mortgage lending option from credit unions could be a year away, assuming it gets permission from the Central Bank, and credit unions have yet to present their plans to regulators, the Independent reported.
The Irish League of Credit Unions presented two options for offering mortgages at its recebt annual general meeting:
- A centralized new regulated entity would be created, with funding from individual credit unions. Members who want a mortgage would be referred from their local credit union to this lender. The model is based on that already in place in Canada.
- The member would get the mortgage from their local credit union, which would handle the approval process and funding.
The Independent said that regulators, which “regularly question the competence of credit unions, are unlikely to approve individual credit unions being directly involved in approved mortgages.”
The Independent quoted Ed Farrell, the interim director of the Irish League of Credit Unions, as saying the country’s CUs could make between €3 billion and €4 billion in mortgages, given the current €13 billion in assets, but just €3.5 billion in current loans outstanding.