Reflections from CUMA 2025: Balancing Growth & Governance

Ireland’s credit unions are at a turning point, evolving from simpler savings and loans institutions into fully-fledged financial service providers.  With recent regulatory changes, it is clear that the government sees them becoming our “community banks” – offering personal loans, mortgages, business loans, current accounts and insurance.  However, this transition is in its early stages, with credit unions still understanding how to adapt their business models to sustain long-term growth. 

With the sector on the threshold of significant transformation, this year’s CUMA Conference 2025 presented the perfect opportunity to ask questions, share experiences and voice challenges.  

The expanding role of credit unions means maximising opportunity while minimising risk. 

A key sentiment emerging from CUMA 2025 was that a cautious, strategic approach will be crucial for steady and sustainable growth.  While there is significant potential for credit unions to do more for their members, careful liquidity management, regulatory compliance and operational resilience are essential.  

As the Deputy Governor of the Central Bank, Sharon Donnery recently stated: 

“It is not often you hear a regulator asking a sector to grow its loan book – to say that we are changing the rules to enable you to do more.  So, you won’t be surprised to hear me say that with opportunities come responsibilities.  

And so, while the sector continues to mature its offerings – it must also continue to mature its risk management and governance.” 

The past ten years have been transformative for Irish credit unions.  The number of institutions has halved, while the number of large Credit Unions has more than doubled.  Average reserves now stand at 16.5%, well above the statutory minimum of 10%.  There is an accelerated lending trajectory with substantial growth in loan portfolios – total loans have grown by 73% in the last ten years – and half of this growth has occurred in just the past two years.  More financial products are now available than ever before: mortgages, business loans, current accounts – and with an average loan-to-asset ratio at circa 33%, credit unions still have significant capacity to expand lending activity. 

However, while recent times have been a time of growth, there must also be an acknowledgement of the risks involved and the past mistakes of the financial sector, as well as a general acknowledgement of the limitations of credit unions – the model, the liquidity and the funding mechanisms that they can access, in comparison to banks.  

As Dean Roche, Head of Finance at Ireland’s largest credit union, St Raphael’s Garda Credit Union, made clear in his remarks, caution is the dominant sentiment, even among the most capable institutions.  St Raphael’s would not be approaching the proposed 30% mortgage lending limit set out in CP 159 anytime soon, opting for steady and sustainable growth instead and running their business to ensure it continues to be both financially and operationally resilient.  

As credit unions evolve, so must their governance and risk management structures.   

Recent legislative and regulatory proposals will create substantial opportunities for credit unions to expand their business models responsibly.  

The Credit Union (Amendment) Act 2023 facilitates enhanced collaboration between credit unions and paves the way for corporate credit unions.  CP 159 proposes the decoupling of lending limits, with separate concentration caps for house lending (30% of total assets) and business lending (10% of total assets). It also provides for the removal of asset-tiering restrictions, allowing all credit unions to operate within the same concentration limits regardless of size. 

With retail deposits as a relatively stable funding source, credit unions could become an effective player in the Irish mortgage market.  However, achieving all this requires a fundamental shift in risk culture and Asset and Liability Management (ALM). 

Donal Corbett, CEO of Lumon FX, Europe reminded us in his opening remarks that “Markets can remain irrational longer than you can remain solvent.” He took us back to 2008, when a credit crisis led to a liquidity squeeze which led to a credit crunch.  

Historically, banks focused on capital but underestimated liquidity risk—leading to stark regulatory changes post-crisis.  Credit unions currently lack advanced funding tools such as short-term repo arrangements and access to ECB funding, medium term note programmes and long-term securitisations, and their ALM frameworks are still being developed.  This means their ALM practices must mature before they embark upon a journey towards significant long term lending expansion.  

Credit unions can also consider proactively adopting best practices from the banking sector using for example tools similar to the banking liquidity ratios.  It is also vital that credit unions continue to closely monitor their savings on a forward-looking basis, as well as their lending and investment strategies, to mitigate maturity mismatches. 

And for smaller credit unions, they should be undertaking significant readiness assessment work before they consider entering new product lines such as mortgages and business loans.   

For effective asset and liability management, learn what good looks like. 

In this new territory, understanding “what good looks like” is more crucial than ever.  Dean Roche offered some key insights into how St Raphael’s has maintained stability and growth. 

With ten consecutive years of loan book expansion and a robust Asset Liability Management (ALM) framework, St Raphael’s welcome CP 159 as a progressive step.  The key to their risk strategy? Vigilant liquidity management.  They work to ensure that lending growth doesn’t outpace the predictability of members’ savings. 

Dean emphasised that sustaining loan book growth depends on several factors, including the retention of existing shares, new deposits, and the maturity timing of investments.  This approach centres on discipline: liquidity positions are assessed daily, weekly, and monthly to maintain financial resilience.  

Dean believes St Raphael’s is an attractive mortgage provider due to its trusted reputation, stability, personalised service, and not-for-profit model and he presented St Raphael’s approach for navigating these uncertain waters.   

His advice? Keep pricing structures simple, remain vigilant about member share trends, define a clear risk appetite and enhance ALM frameworks. Stress testing is also vital in preparing for any potential volatility.  

Embracing digitalisation is crucial to compete in a changing financial landscape – but it brings a fresh challenge. 

Another key topic discussed at the conference was the generational shift in expectations that credit unions are now facing.  With 86% of Irish consumers using mobile banking, consumer behaviours are changing, and credit unions must adapt to this new environment. Many credit unions have embraced mobile apps and online banking, but the changing demographic of credit union members presents a challenge for the future of the loan book.  

Traditionally, credit union savings have been “sticky”, but digitisation and SEPA instant payments are making it easier to move your money.  This poses a risk to the future stability of credit unions’ funding sources.  Funds that once remained within the credit union ecosystem can now be transferred instantly to digital banks.  Credit unions can no longer assume that retail savings will be as “sticky” in the future as they are now.  

Times are changing but credit unions must protect their unique position in the community. 

In all discussions, it was widely recognised that a major strength of credit unions remains their member-first approach.  They have always prioritised member welfare, particularly during times of financial hardship like COVID.  This presents a unique challenge as credit unions expand their long-term lending capabilities. They must develop their risk management, operational resilience and financial resilience frameworks. 

Despite the challenges ahead, there is real optimism for credit unions’ future.  The sector has the capacity to grow— safely and steadily — with improved governance, investment strategies and a forward-thinking approach to Asset & Liability Management.  It is vital that this is done properly so they can retain their position as Ireland’s most trusted, community-driven financial institutions. 

Contact EisnerAmper Ireland 

Contact Diarmaid O’Keeffe, Partner, Head of Audit & Advisory, to discuss how to align your strategy with industry changes. 

Authors