Credit unions have urged the Government to introduce regulatory changes to allow them to better respond to members affected by the Covid-19 crisis.
The Credit Union Development Association (CUDA), which represents 50 branches, said that as the sole provider of credit for many Irish people, and as a body that has over 3 million members, it was critical that changes be introduced to help borrowers experiencing financial difficulties.
The CUDA estimates that up to 100,000 of Credit Union members may be in a situation where they are or will experience loss of income due to the coronavirus outbreak.
At present, credit unions, which together account for an estimated 34 per cent of the consumer lending market locally, are operating on a case-by-case basis to assist members in difficulty, helping them by taking measures such as reducing payments, enabling individuals to go interest only, extending loans and so on.
CUDA said it is involved in ongoing discussions with the Central Bank to ensure capital requirements don’t stifle any of the means by which it can assist members.
Its chief executive Kevin Johnson told The Irish Times it wanted to be able to ensure borrowers are not penalised for missing loan payments and that their long-term credit rating isn’t negatively affected.
“No-one knows how long crisis measures will have to be in place and it is difficult to quantify the full financial impact these measures will have on credit union members, the economy and indeed credit unions themselves,” he said.
“So far calls to credit unions have increased by about 400 per cent with many calls from concerned members about their sudden loss of income and how they may be unable to meet some or all of their loan commitments,” Mr Johnson added.
The association has created a web form to help standardise the requests process for loan repayment flexibility by members, and to enable individual credit unions to redeploy staff to assess and assist as a priority.