The Ryan Review

The Credit Union Registrar’s recent speech to CUDA (Credit Union Development Association) was high on regulation and low on the prospect of community lenders becoming the mortgage provider of choice.

While restructuring since 2013 has seen 135 (34pc of the total) merged (a minority by shotgun wedding), Patrick Casey warned that even though 54 credit unions now have assets over €100m (up from 28), the cost income metrics remain ‘very high’ meaning the sector still has much to do to before it can join the big league lenders. The timing of his speech is significant given that he is now in receipt of submissions under the consultation paper (CP125) which the sector hopes will allow them a broader remit on long-term lending for property, up to 15pc of total assets, rather than 15pc of their loan book, which pertains currently.

In truth, many don’t want to touch mortgages with a barge pole, however the absence of a Common Bond means that the smaller operators cannot kick underwriting or big loan applications upwards to another, better resourced provider, which is daft.

Casey’s view that “only the larger stronger credit unions will be capable of demonstrating the necessary scale, available resources and competence/ capability required” may not be what the sector wants to hear, but on this one, he’s right.