Central Bank finds almost a fifth of credit unions ‘failing to check if members can repay loans’

The Central Bank says credit unions are offering loans without checking if members can repay them.

It says a “concerning number” of the institutions need to improve how they are run and operate to a higher standard.

According to the Irish Independent, the latest Central Bank report shows it made 700 visits to Credit Unions in the past six years.

The lack of affordability assessments for loans made up 19% of the risk issues identified.

Patrick Casey, who operates as registrar of credit unions within the Central Bank, called for higher standards.

He said: “Whilst governance standards have improved across the sector, governance remains one of the key risk areas for credit unions. It is concerning that over 60% of individual risks identified during on-site engagements relate to governance or operational risks.”

Some credit unions were also found to be failing to document processes and procedures.

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