Registrar of Credit Unions Patrick Casey has said that recent Central Bank regulatory framework changes now give greater flexibility for longer-term lending, including house and business lending.

Addressing the Credit Union Development Association’s Annual Conference 2020 in Killarney, Mr Casey said that while the Central Bank would consider lending capacity changes in the future, any such capacity change would only follow credit unions demonstrating:

• a financially viable business line,
• the required competence and capability,
• more embedded risk management frameworks,
• access to support service type structures.

Patrick Casey highlighted the importance of credit unions in the Irish financial services landscape, referencing their strong capital position, while noting depressed income generation, the impact of the low interest rate environment and high cost metrics across the sector. 

He said that commercial challenges mean credit unions must strengthen their core prudential foundations across governance, risk management and operational capability.

On the regulatory framework for credit unions, Patrick Casey said its tailored and proportionate nature facilitates prudent growth.

Peer review

He also referred to the positive validation of the Central Bank’s regulatory and supervisory approach following a recent international peer review by the International Credit Union Regulatory Network (ICURN).

In terms of the responsiveness of the regulatory framework, he highlighted recent developments such as credit union current accounts, changes to the investment framework and facilitation of collaboration through credit union owned shared service entities (CUSPs). 

Member-centric

He concluded: “The recognised trust and regard of members is a strong basis from which to grow new products and services. In transitioning, credit unions must retain the valued member-centric ethos they are recognised for.

“Members’ trust that has been built up over time can be lost very quickly if their best interests are not protected – which presents much food for thought as you seek to pursue a more complex business offering.”