The Central Bank has issued new lending rules for credit unions.
The rules remove the existing lending maturity limits which cap the percentage of credit union lending which may be outstanding for periods of greater than 5 and 10 years.
Maturity limits will be replaced by new concentration limits, on a tiered basis, for home mortgage and business loans, expressed as a percentage of total assets.
There are three tiers under the new rules as follows:
i) A combined concentration limit for house and business loans of 7.5 per cent of total assets for all credit unions.
ii) A 10 per cent limit, conditional on a credit union satisfying asset size (at least €50 million) and regulatory reserves qualifying criteria and notifying the Central Bank in advance.
iii) A 15 per cent limit for credit unions with total assets of at least €100 million, subject to Central Bank approval.
The new rules will come into effect in January 2020.
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