RegSol Blog


New Lending Rules for Credit Unions and Enforcement Action against Savvi Credit Union

December 2019


New Rules

The Central Bank of Ireland, as a result of CP125 - Consultation on Potential Changes to the Lending Framework for Credit Unions, has introduced new lending rules to come into effect in January 2020.

The new rules will remove the maturity limits which currently cap long term lending and instead introduces a tiered approach, based on concentration limits, for mortgage and business loans relative to total assets. The relevant tiers are as follows:


  • A combined concentration limit for house and business loans of 7.5 per cent of total assets for all credit unions.
  • 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.
  • A 15 per cent limit for credit unions with total assets of at least €100 million, subject to Central Bank approval.

Further proposals in relation to removal of the existing longer term lending maturity limits, new maximum maturity limits for secured and unsecured lending, and the definition for business loans are included in the Feedback Statement to CP125 which is available here

Enforcement Action

Somewhat ironically, in the same month, the Central Bank published its most recent settlement agreement (7th November) within the administrative sanctions regime, it was against a Credit Union and involved breaches of the existing lending rules.

Savvi Credit Union was fined €185,500 and reprimanded for failing to comply with the limits for long term loans and also reimbursing travel expenses to a Director (totalling €28,341 over 4 years), at rates in excess of Civil Service rates. You can read the full settlement agreement here

As we usher in the 2020’s, it is worth noting that the Central Bank of Ireland has consistently issued fines, reprimands and taken enforcement action against Credit Unions on an annual basis since 2012.  Failures vary from mismanagement of internal controls and governance arrangements, fitness and probity to AML breaches. Fines have ranged from €198,000 to as little as €5000 for failures in complying with prudential regulatory returns.

Ringing in the new year should allow for the Credit Union Sector at least the opportunity to provide more loans to support their members with the added Christmas bonus of more local options for the Irish consumer. Let’s hope it doesn’t give rise to another enforcement action.

By Judy De Castro - Regulatory Consultant