Ireland - SME Regulations Now Applicable to Credit Unions

Action Required

As of 1 January 2017, Credit Unions lending to small and medium enterprises ("SMEs") must have appropriate systems, policies and procedures in place to comply with regulations issued by the Central Bank of Ireland ("CBI"). “In practice, virtually all business lending by Credit Unions (whether to companies, partnerships or sole traders) will be captured by the regulations” as Credit Unions rarely provide business loans to non-SMEs.

Non-compliance with these new requirements would be a serious breach that may result in fines and/or other penalties under the CBI’s administrative sanctions regime.


In December 2015, new regulations were published by the CBI governing dealings between regulated entities and SMEs. The Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 (as amended, the "SME Regulations") came into force for regulated lenders (other than Credit Unions) from 1 July 2016 and for Credit Unions from 1 January 2017.

The SME Regulations replaced an existing CBI Code of Conduct for Business Lending which was originally introduced in 2009. Credit Unions were not required to comply with this Code of Conduct with the result that the task of putting in place the necessary systems, policies and procedures to comply with the SME Regulations has proved more of a challenge to Credit Unions that to other regulated entities.


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