Credit Unions set to shake up the mortgage market | PaycheckPlus

What impact can Credit Unions & €400m have?

CUDA (Credit Union Development Association), a Credit Union representative & development association owned by Credit Unions, has announced this week that they have paved the way for credit unions to enter  the mortgage market. Kevin Johnson, CEO of CUDA said during the announcement that “unlike banks, Credit Unions aren’t required to deliver profits for shareholders so anything we offer is priced to meet the needs and demands of members.”

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Credit Union lending restrictions

Credit Unions are subject to restrictions on lending which only allows them to loan 10% of their total loan book on terms that are 10 years or more. CUDA notes that few Credit Unions have the resources to provide such loans therefore only 2% of a collective €5 billion has been lent out in terms 10 years or greater. As a result Credit Unions have 8% of the €5 billion to lend, which equates to €400 million.

What could this mean for mortgage borrowers?

With the mortgage market being dominated by several banks the increased competition would be good for borrowers. A drop in rates would be expected along with an increase in borrowings. In 2016 AIB, BOI and Ulster Bank accounted for close to 80% of the mortgage market. Banks with such domination in the market won’t give up their share easily. Credit Unions will have to fight to gain a foothold in the market. But can they put up this fight with the difficulties that they face?

 Can Credit Unions take advantage?

Credit Unions have faced and continue to face significant difficulties. The Credit Union Advisory Committee’s 2016 survey of Irish Credit Unions highlighted a number of challenging areas faced by Credit Unions. These include:

  • Technology for service delivery
  • Attracting and retaining young members
  • Central Bank Restrictions
  • Regulatory Framework
  • Economic conditions

Overcoming these difficulties and challenging the dominated mortgage market will be tough. But PaycheckPlus is here to help.

PaycheckPlus – Payroll Outsource Provider

Here at PaycheckPlus we have the experience and expertise that Credit Unions need when it comes to payroll compliance and payroll efficiency. We already work with a number of large Credit Unions and have in-depth experience in meeting Central Bank requirements for compliance. Payroll compliance is crucial for all businesses and Credit Unions have some of the most stringent and complex compliance requirements. Our experienced payroll specialists have the expertise that Credit Unions require to ensure compliance. We also have a proven track record in helping many of our Credit Union clients to structure their payroll in the most effective way. This enables our Credit Union clients to focus on their business rather than on Payroll processing and compliance. Our Credit Union clients then have more time to tackle the challenging areas noted above and to focus on revenue generation.

To ensure payroll compliance, improve payroll efficiency and for expert support contact PaycheckPlus today.

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For more information on our Outsource Payroll Managed Services please Request a callback from our Payroll Team today or call our office on 041-9892100.

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