Towards a new era for Irish Credit Unions… writing exclusively in the Roscommon People, MEP Ciaran Mullooly on how new supports for credit unions could benefit everyone
Ireland’s housing market faces a severe crisis. Mortgage rates exceeding 4%—among the highest in Europe—have made homeownership increasingly unattainable. In this context, innovative solutions are imperative. A promising answer lies within our local communities: credit unions.
These community-focused institutions, long integral to Irish life, could significantly reshape the mortgage market through proposed lending regulation changes, all while continuing their essential community services.
A Legacy of Community Support
Established in the 1950s, credit unions have consistently provided financial services tailored to ordinary citizens, often neglected by traditional banks. Inspired by cooperative models from abroad, trailblazers such as Nora Herlihy and Sean Forde opened Ireland’s first credit union on Dublin’s Donore Avenue in 1958.
Their mission was revolutionary yet straightforward: to create community-driven financial institutions offering equitable savings and loans.
Today, over 200 credit unions serve more than 3 million members across Ireland, collectively managing assets exceeding €18 billion. Known for their fairness and trustworthiness, these institutions remain vital to local communities. However, strict regulations have hampered their ability to engage in long-term lending like mortgages—a sector where they have untapped potential.
Unlocking Credit Union Potential
Despite their reach, credit unions currently account for less than 0.7% of Ireland’s mortgage market—a surprisingly small share given their scale. Proposed reforms by the Central Bank aim to change this, allowing credit unions to allocate up to 30% of their assets (approximately €6 billion) to mortgage lending, alongside an additional 10% (€2 billion) for business loans.
This shift could be transformative, enabling credit unions to issue over 18,000 new mortgages at competitive rates starting as low as 2.9%, similar to those offered by Youghal Credit Union. Increased competition in the mortgage market—currently dominated by three major banks controlling over 90% of lending—would be a welcome development.
The Broader Impact on Communities
The potential benefits of these changes go beyond providing more mortgage options. They could invigorate local economies and bolster community resilience in several ways:
- Affordable housing: Lower mortgage rates could make homeownership more accessible, challenging the high rates set by traditional banks.
- Community reinvestment: Unlike profit-oriented banks, credit unions reinvest surplus income into local areas or return it to members via lower loan rates and dividends.
- Stability and sustainability: Diversifying into mortgages, personal loans, and business lending would enhance the financial stability of credit unions.
- Support for small businesses: Increased lending capacity could provide small enterprises with crucial funding for growth.
Pushing for Further Modernisation
In addition to these measures, credit unions are advocating for further reforms to modernise their operations and ease regulatory constraints, including:
- Simplified compliance procedures.
- Enhanced fraud prevention through a national fraud database and PPSN checks.
- Greater flexibility to diversify service offerings.
These updates would enhance the ability of credit unions to serve their members effectively while maintaining their role as a cornerstone of Ireland’s financial system.
Looking Ahead
As an MEP, I firmly support these proposed changes. Credit unions embody fairness, community values, and a member-first philosophy that has benefited Irish families for decades. They have consistently supported communities by encouraging saving, assisting with unexpected expenses, and promoting financial inclusion where others have not.
Now is the time to empower credit unions with the resources and regulatory freedom to achieve even greater impact—for Ireland’s families and the communities we cherish.
