The Credit Union Development Association (CUDA) believes that new rules, announced by the Central Bank today, which align the volume of loans a credit union can issue to their asset size, is a hugely significant development and could enable many credit unions to double or treble their lending in certain loan classes.
Up until now the level of loans the credit union could give out was based on the percentage of loans already issued. The CUDA say this was holding credit unions back from providing more loans to support their members and their communities.
Now the volume of loans will be based on a percentage of assets of the credit union. With an average of just 28% of assets currently lent out, the Regulations will allow many credit unions to do more loans for more people.
CUDA has persistently lobbied for these changes since 2015 and claim it will bring much needed competition to the market for mortgages, home renovations and business loans.
Speaking today, CEO of the Credit Union Development Association (CUDA), Kevin Johnson said, "We look forward to providing a wider range and higher volume of loans now permitted under the new rules and we welcome the Regulators commitment to re-evaluating these limits as the sector evolves in these areas of lending. In particular, CUDA believes credit unions are ready and willing to help do more to fill the void for business loans left by the banks."