DUBLIN, Ireland—Credit unions in this country are objecting strongly to a number of new proposed restrictions, including capping member savings of €100,000 per member. That rule is to go into effect in January, 2016.
Meanwhile, Ireland’s Central Bank is also finalizing regulations it intends to implement even as credit unions are arguing that their input has been ignored. Local media quoted credit unions as calling the new regulations a “retrograde step” that will retrict them “from competing effectively with other financial service providers into the future.” The Irish League of Credit Unions, the Credit Union Development Association, the Credit Unoin Managers’ Association all have protested the new rules.
Ireland’s unions said the limits on individual savings, loan size, loan duration and even where they can invest their surplus funds are putting restrictions on their ability to compete and grow.
In a joint statement the three organizations criticized what the Central Bank, saying that "Credit unions are now looking to provide more services to their members and their local communities at fair and reasonable rates - instead the draconian rules published today will restrict credit unions from offering real choice to members."
The new rules also include a 25-year limit on the length of loans that can be made by credit unions, and limit individual credit unions' ability to invest savers' funds, including in shares, which representative organizations said will have the effect of forcing the sector to place their funds on deposit with the main banks.