Some credit unions are already active in the area of higher-risk personal lending.  Other credit unions may be contemplating undertaking higher risk loans and may experience an inflow of former clients of money-lenders into membership.

The four credit union associations, CUDA, CUMA, ILCU and NSF are providing the following advice to all credit unions in relation to the recent exit of a number of licensed money lenders from the Irish Market:

“If your credit union does not already have a policy on higher-risk personal lending, the credit union should undertake a risk analysis, develop a pricing model and conduct an AML assessment before its Board considers developing such a policy. The credit union’s Risk Appetite Statement should reflect the risk tolerance of the credit union in this area.”

Following this policy development, appropriate training of staff should take place.