DUBLIN, Ireland–The chairman of Ireland’s largest credit union has issued a statement strongly critical of the country’s regulator, saying it is preventing CUs from competing with banks in serving consumers.
Ireland’s Central Bank began regulating credit unions in 2011.
According to Sean O’Brien, chairman of the €400m St. Raphael’s Garda Credit Union, which has 34,000 members, "substantial and in many cases, unwarranted obstacles” are being “placed in (credit unions) way" and “excessive restrictions, enforced through regulation are killing credit unions and making it impossible for them to compete in a commercial manner."
O’Brien’s comments, which he made in a letter, were reported by Newstalk.com.
O’Brien said the credit union has concerns over two regulations in particular. First, the fact the credit union is restricted to lending only 15% of its total loan portfolio of a duration of more than 10 years, including mortgages. O’Brien said this limit is in place even though there is huge member demand and the loan is secured. Second, members can currently only deposit a maximum of €100,000 with their credit unions – the amount covered by the State-backed deposit insurance program. That limit does not apply to banks.
Newstalk.com reported that the CU’s CEO, Claire Byrne, speaking on Breakfast Business, rejected suggestions that this latter point meant that there are many Garda members and families with more than €100,000 available that they'd like to deposit.
"We're not suggesting that but we're looking again to the future and saying that it doesn't seem fair that the regulator, who should be looking after the wellbeing of credit unions, is saying that you can't put more than a certain amount of funds with credit unions, and you're forcing people to think about banks for their savings,” she was quoted as saying. “And I suppose the risk is, is that if they have to consider banks for larger amounts, perhaps they'd consider banks for all of their savings."