Fianna Fáil is calling for changes to be made to the rules on lending restrictions to Credit Unions.

Spokesperson on Finance Michael McGrath made the call and revealed that Credit Unions could offer "badly needed" competition in the mortgage market.

Deputy McGrath was commenting on news of an initiative from the Credit Union sector to assist member Credit Unions move into the mortgage market.

He said: "In reality, for an individual Credit Union, this restriction means that even lending a small number of mortgages will bring them up to their 10% restriction very quickly. Given the investment that Credit Unions have to make to move properly into the space of mortgage lending, this lending restriction effectively stops them in their tracks. Engaging in longer term lending such as mortgages offers many advantages for Credit Unions including greater stability around their income levels.

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"At a time when our banks continue to charge excessive mortgage interest rates, you would think the State would be bending over backwards to encourage new entrants to the mortgage market, such as Credit Unions. However, the current government seems to have little regard for the Credit Union movement and has done nothing practical to assist the growth and development of the sector."

(CD/MH)