Irish credit unions are refusing loans to thousands of Irish consumers after being ordered to limit their lending, says the League of Credit Unions.
The Central Bank of Ireland has told nearly 200 of the country’s 392 credit unions to restrict lending, to the benefit of banks and other lenders.
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Kieron Brennan, CEO of the League of Credit Unions, said: "Banks will be loving the fact that so many credit unions have been told to limit their lending.
"If a credit union has a lending restriction imposed and it has reached its limit, then it cannot even lend to the prime minister if he walked in looking for a loan."
Brennan went on to say that parents were being denied loans to cover the cost of sending their children to college and families were being refused money for the funerals of loved ones.
Meanwhile the regulator said that restricted had been imposed due to high levels of arrears at credit unions.
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By GlobalDataThe Central Bank’s registrar of credit unions, Sharon Donney, said: "Ongoing concerns about arrears in individual credit unions have been a key driver of the imposition of lending restrictions."
She said that the loan books of one-fifth of credit unions were in arrears and in another 47, arrears made up over 30% of loan books.
Brennan fought back against Donney’s remarks, saying that arrears were actually falling.
He said: "In banks, arrears are still going up – particularly mortgage arrears.
"I am not aware of similar inflexible restrictions being imposed on other lending institutions."
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