Credit Union Services, Approvals & Notifications

Credit unions provide savings and loans under Part III of the Credit Union Act, 1997 Act (the 1997 Act), these are considered the core services of a credit union. Generally, other services are categorised as ”additional services” and require approval from the Central Bank of Ireland (the Central Bank) under the additional services provisions – sections 48-52 - of the 1997 Act. However, in accordance with section 48(2) of the 1997 Act, the Central Bank can, by regulations, prescribe services as being excluded from being additional services and may make such exclusion conditional on compliance with such conditions as may be prescribed by the Central Bank; these prescribed services are generally referred to as “exempt services”.  The Central Bank has prescribed exempt services for credit unions – these are contained in Schedule 2 of the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (the 2016 Regulations).

On member savings, Regulation 37(1) of the 2016 Regulations provides that a credit union may apply to the Central Bank for approval to increase individual member total savings in excess of €100,000. In order to apply for such approval, an application must be submitted in writing to the Central Bank and contain such information as the Central Bank may specify from time to time.

On lending, Regulation 12A of the 2016 Regulations provides that a credit union with total assets of at least €100,000,000 may apply to the Bank for approval to increase its combined total gross amount outstanding in relation to house loans and business loans to 15% of the assets of the credit union.

Where a credit union wishes to provide services to its members, in addition to core services and exempt services, that are of mutual benefit to its members and do not impose undue risk to members’ savings, an application may be made to the Central Bank for approval to provide such additional services in accordance with the provisions set out in sections 48-52 of the 1997 Act.  

The Central Bank is, in principle, supportive of credit unions developing additional services. The Central Bank will consider proposals from credit unions on new additional services they wish to provide to members where the credit unions can demonstrate that:
  • The proposed additional service is supported by a robust business case
  • The proposed additional service is not contrary to financial services legislation
  • The board of directors has a sound appreciation of the nature of the additional service proposed and is fully informed of the strategic, governance, risk management, operational, financial and legal implications involved
  • Systems and controls are in place to ensure any risks involved in the provision of the additional service are managed and mitigated. 

Where a credit union is considering developing additional services, early engagement with the Central Bank in relation to such proposals is advisable before embarking on the detailed development of any additional services proposal.  

Central Bank approval for the provision of additional services:

Before a credit union can provide additional services, it must ensure that it complies with the legislative provisions set out in sections 48-52 of the 1997 Act. This includes obtaining the approval of the Central Bank for the provision of the additional service. A summary of the process is set out below:

  • Contact credit union supervisor:

As set out above, early engagement with your credit union supervisor in the Registry of Credit Unions in relation to the proposed provision of an additional service is encouraged. This engagement may include the submission of a proposal in relation to the provision of the service.

  • Obtain a Preliminary View from the Central Bank: 

1. Where the Registry of Credit Unions has indicated that the Central Bank would consider an application for a preliminary view in relation to the proposal to provide the additional service, then, as required under section 48 of the 1997 Act, the credit union should obtain a preliminary view from the Central Bank in relation to that proposal.

The following is a Sample Preliminary View Application - Sample Preliminary View Application Form. The Central Bank will, on request, provide an appropriate Preliminary View Application form relevant to the service being applied for. For details in relation to the preliminary view application process, credit unions should their credit union supervisor in the Registry of Credit Unions.

2. On receipt of an application seeking preliminary approval, the Central Bank will review the information provided and will then give a preliminary view as to whether and to what extent the provision of the service would be likely to be approved. However, this preliminary view shall not prejudice the final approval decision. 

  • Approval by the credit union of the provision of the proposed additional service:

Once a positive preliminary view has been received from the Central Bank, the credit union must adopt a decision to provide the proposed service to its members. Such a resolution may be passed in any of the following ways: 

a) by AGM; or
b) by SGM; or
c) by a resolution of the board of directors of the credit union.

Once the resolution has been passed at the AGM / SGM or by the board of directors of the credit union, the credit union may proceed with obtaining formal approval from the Central Bank in accordance with section 49 of the 1997 Act. 

  • Amendment to standard rules of a credit union (if necessary):

 The credit union object specified in section 6(2)(g) of the 1997 Act (i.e. “ subject to section 48, the provision to its members of such additional services as are for their mutual benefit”) is one of three optional objects a credit union may adopt within its registered rules. Where this object is not already included within an individual credit union’s registered rules, the credit union will, prior to providing additional services, need to amend its registered rules in order to include the object. In accordance with section 14(2) of the 1997 Act, an amendment of the registered rules of a credit union is not valid until the amendment has been registered under the 1997 Act.

  • Obtain Formal Approval from the Central Bank:

Having obtained a positive preliminary view from the Central Bank, a credit union must submit a formal application for additional services approval to the Central Bank. As set out in section 49(2) of the 1997 Act, an approval application should include information about the following:

a) the protection of members for whom the services are to be provided from conflicts of interest that might otherwise arise in connection with the provision of the services;
b) the provision proposed for securing that adequate compensation is available to those members in respect of negligence, fraud or other dishonesty on the part of officers of the credit union in connection with the provision of the services;
c) the extent to which and the manner in which the provision of the services will require the involvement of persons with particular qualifications or experience;
d) the cost of providing the services;
e) the income expected to accrue form any changes made for the services; and
f) the credit union's proposed principal, in a case where the approval application relates to the provision of services by the credit union as agent for another;

and, where an approval application relates to the provision of additional services of more than one description, the information referred to above shall be given separately in respect of each description of services. 
Where formal approval is granted, the credit union must comply with any conditions imposed on the approval by the Central Bank under section 49(7) of the 1997 Act, the requirements set out in sections 48-52 of the 1997 Act and any other legal and regulatory requirements. 

  • Cessation of Additional Service/Change of Regulated Financial Service Provider:

Where a credit union ceases to provide an additional service to its members, it should notify the Central Bank of the cessation of that service.

Where a credit union is providing additional services whereby the credit union is introducing its members to another regulated financial service provider, the credit union should notify the Central Bank in advance where it proposes to change the regulated financial service provider.

Credit union exempt services are services, which are prescribed, in Schedule 2 (the Exempt Services Schedule) of the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (the 2016 Regulations), as amended. Subject to conditions set out in the Exempt Services Schedule, credit unions may provide these services without obtaining an additional services approval from the Central Bank.

In November 2024, the Central Bank made the Credit Union Act 1997 (Regulatory Requirements) (Amendment) (No. 2) Regulations 2024 (the 2024 No.2 Regulations). The 2024 No. 2 Regulations make changes to the exempt services provisions of the 2016 Regulations and in particular amend Regulation 48 and Schedule 2 of the 2016 Regulations. The 2024 No.2 Regulations are effective from 1 January 2025.

Credit unions are required to comply with all conditions attaching to the provision of exempt services as set out in the 2016 Regulations.  In particular, credit unions must submit notification to the Central Bank at least 30 days before the credit union intends to make the following exempt services available to members:

  • Current account services listed at paragraph 2 of the Exempt Services Schedule; and
  • Other intermediation services listed at paragraphs 15 (c) and 15(d) of the Exempt Services Schedule.

Credit unions must submit the required notification using the relevant form published by the Central Bank on this website for that purpose. The below links contain the relevant notification form to be submitted where a credit union intends to provide these services.

Application to Increase Savings over €100,000

The Regulations set out a maximum individual members’ savings limit of €100,000. The Regulations provide that credit unions, with a minimum asset size of €100 million, may apply to the Central Bank for approval to increase individual members' savings in excess of €100,000 where they can demonstrate that it is consistent with the adequate protection of the savings of members and effective and proportionate, having regard to the nature, scale and complexity of the credit union for them to do so. 
Credit unions with a minimum asset size of €100 million (by reference to the most recently submitted Prudential Return of the credit union) that wish to apply to the Central Bank for approval to increase individual members' savings in excess of €100,000 must complete an application form, have it approved by the board of directors and signed by the chair of the board on behalf of the board of directors and submit it to the Central Bank.

The Explanatory Note & Application form include notes on how to complete and submit the application and is available to download here.
 

Applications for the 15% Combined Concentration Limit for House and Business Loans

The Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 prescribe limits for credit unions in respect of their combined total amount outstanding in relation to house loans and business loans as a percentage of a credit union’s total assets. Credit unions with total assets of at least €100 million for two or more consecutive quarters immediately preceding an application may apply to the Central Bank for a 15% Limit.

In order to grant approval for this limit, the Central Bank must be satisfied that the credit union has demonstrated that the approval would be consistent with the adequate protection of the savings of members of that credit union and effective and proportionate, having regard to the nature, scale and complexity of the credit union. For the purpose of satisfying itself as to these matters, the Central Bank must consider the total realised reserve position of the credit union and such other matters it may specify from time to time. Credit union seeking to avail of the 15% Limit must complete an application form, have it approved by the board of directors and signed by the chair of the board on behalf of the board of directors and submit it, together with supporting documentation, to the Central Bank.

The two formal stages of the application process are as follows:

  • Stage 1: Submission of Completed Application and Application Assessment 
  • Stage 2: Approval/Refusal

In advance of submitting a completed Application Form, we recommend that the credit union discusses the proposed application with its supervisor in the Registry of Credit Unions who may be in a position to identify issues that the credit union should address prior to completing and submitting an application.

The Application Form and the associated Guidance Note on the Application Process and Application Form are available at the links below.

Template for the financial projections, annual arrears information and annual liquidity information to be submitted by credit unions as part of an application.