New regulations will significantly raise the lending capacity for credit unions from €2.9 billion to €9.9 billion for mortgage and business lending. The Central Bank indicates this change aims to future proof lending limits and provide certainty for credit unions in business planning. Previously, strict limits imposed a cap of 7.5% of total assets for mortgage and small business loans, with larger credit unions able to request higher limits. Following the changes, new caps will set mortgage lending at 30% and business lending at 15% of total assets.
The new rules will increase the total lending capacity of the sector for mortgage and business lending from €2.9bn to €9.9bn, allowing credit unions to offer more loans.
The Central Bank views these changes as future proofing lending limits, providing increased certainty for credit unions in their business planning.
Existing limits restrict mortgage and small business lending to 7.5% of total assets, but larger credit unions can apply for permissions for higher amounts.
By separating the lending concentration limits, mortgage lending is set at 30% and business lending at 15% of total assets for credit unions.
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