The Credit UnionManagers' Association said it is receiving letters from creditunions saying the Central Bank of Ireland has told them to restricttheir lending.

The bank's new rules caps some credit unions at a maximummonthly lending limit of 100,000 Euros or approximately $127,650 inU.S. dollars.

Nearly 300 CUs have been told to restrict their lending,according to CUMA. The trade group said it has contacted theCentral Bank about its concerns with the new rules.

CUMA representative Selina Gilleece said while credit unionshave been affected by Ireland's recession, “they have weathered theworst of it so far.”

James O'Brien, Central Bank's registrar of credit unions, toldattendees at the bank's annual Credit Union Regulatory Forums this year the regulator hasgrown concerned with the number of credit unions experiencinginvestment losses in their portfolios.

“Falling income, a static cost base and downward pressure ondividends are all indicators that the sector remains undersignificant stress. An increasing number of credit unions havemigrated into the high-risk category and are on our supervisorywatch list,” O'Brien said.

One of Ireland's newspapers reported that Jimmy Johnstone,president of the Irish League of Credit Unions, sent a letter to the CentralBank criticizing the new limits. The league is a member of theWorld Council of Credit Unions.

“The league board, like its member credit unions, is exasperatedby the imposition of far-reaching regulatory restrictions which aredirectly responsible for credit unions not being able to lend tolong-standing members,” Johnstone wrote.