Mortgage lending at credit unions increased by 10pc in the three months to June, and mortgages now account for almost 10pc of overall credit union lending, the Irish League of Credit Unions (ILCU) said.
Chief executive of the league, David Malone, said the member-owned lenders were managing to grow their mortgage books despite what he said were restrictions imposed by the Central Bank.
The ILCU credit union mortgage loan book has increased by 10pc in the three months to June, to €518m, when compared with the previous quarter.
And when compared with last year, the mortgage loan book is up 62pc.
Mortgages now make up nearly 10pc of the total loan book of the sector.
Mr Malone said public demand for credit union mortgages continues to grow, driven by competitive rates and a personalised service with quick turnaround times.
“However, credit unions are restricted by arbitrary crisis-era regulations, that limit the amount they can lend in respect of mortgages,” he said.
“These limits are actively prohibiting competition and are not in the best interests of financial stability or enhanced consumer protection.
“It is imperative that targeted proportionate changes are made to the existing regulatory limits by the Central Bank,” he said.
Credit unions already offer the cheapest mortgage rates in the market, but many end up having to turn away customers because they quickly exhaust what they are allowed to lend to members.
Finance Minister Jack Chambers is among those calling on the regulator to relax the tough limits it has imposed on each credit union.
Under the Central Bank regulations, credit unions are restricted in the amount they can loan out for mortgages, but banks are not subject to the same strict lending limits.
Asked about the mortgage lending restrictions, the Central Bank said it put the lending measures in place in January 2020.
“Since then, we have seen growth in this area of lending,” it said.
“However, significant capacity still exists within the existing concentration limits for further home and business lending.”
