Credit union loan restrictions eased

Credit unions will be allowed to offer loans at an interest rate of three per cent per month, up from the previous limit of two per cent, the Treasury announces today. The move is designed to allow more borrowers access to short term finance and to let the institutions make money on loans which were previously not commercially viable. The Treasury argues the move will allow the unions to provide an alternative source of finance to those who might otherwise be pushed towards higher cost sources like payday lenders.