CREDIT UNION members are to be allowed take out longer term loans and reschedule existing loans under new measures announced yesterday by Minister for Finance Brian Lenihan.

Mr Lenihan said he was introducing changes to the Central Bank Reform Bill, published yesterday, that would allow members experiencing difficulties to continue making smaller repayments on their loans.

At the moment credit unions are restricted from having more than 20 per cent of their loan portfolio outstanding for more than five years and only 10 per cent of their portfolios may be for more than a decade. Under the new measures, these limits will be increased to 20 per cent and 15 per cent respectively.

However, credit unions to which the new limits will apply will have to receive sanction from the Registrar of Credit Unions as having the necessary controls and safeguards in place and satisfy financial criteria over arrears, reserves and liquidity.

Mr Lenihan said: “Many credit union members are experiencing difficulty in meeting loan repayments due to unfavourable changes in their financial circumstances in the current economic environment.

“Increasing the lending limit for credit unions and formalising arrangements in the area of rescheduling of loans will facilitate credit unions in their wish to ease the position of these members.”