Limerick councilors call to help Credit Unions offer homeowner loans

COUNCILLORS have unanimously backed a call to grant all Credit Union branches the right to become a building society – and offer mortgages.

At this month’s full council meeting, held in the Limerick Racecourse, the five members of the Adare-Rathkeale district saw a motion passed on the issue.

At the moment, it is not common practice for Credit Unions to offer​ loans for houses.

But local councillors have now decided to lobby the leaders of the major political parties in a bid to change this.​

Fianna Fail councillor Kevin Sheahan, a founder member of the Askeaton Credit Union, said: “The Credit Union movement in Ireland has become very strong. The word is they are in a lot of funds at the moment. We have couples going around unable to persuade banks to lend to them for houses. The same people are members of Credit Unions and probably have significant savings in them.”

He said many local Credit Unions are offering loans of six figures.​

”It’s marvellous to see that. But the people who need €150,000 to buy a house or €180,000 to buy a house have good savings, and they need borrowings for a mortgage. The Credit Union should be licensed by the State to give mortgages. There would be no compulsion on Credit Union to exercise this option. But it would be an option for them to apply to the Department of Finance and get their licence,” he said, “If they are in funds, it would be a healthy exercise. They are encouraging people to borrow money, but the type of money that's wanted is not available because of Department of Finance regulations.”

His motion was seconded by Fine Gael councillor Stephen Keary.

”I see young couples seeking to build their own home and it's  impossible,” he told the meeting.

Newcastle West-based councillor Tom Ruddle, an auctioneer by trade, has experienced the sharp end of problems with mortgage lending.

He spoke of how a couple came into his offices, having saved up half the money for their home.

They had seen a mortgage granted, but then the bank pulled the plug as they had switched to the Covid-19 job retention scheme.

“They were obviously very upset,” he said, “We have to have competition and in the banking sector, and a Credit Union offering this would be ideal.”

Another auctioneer, Cllr Gerald Mitchell also supported the call​, as did the Mayor of Limerick, Cllr Michael Collins, who also works in this sector.

The motion was submitted by Cllrs Sheahan, Keary, Bridie Collins, Emmett O’Brien, John O’Donoghue and Adam Teskey.