Dáil Éireann Debate, Tuesday - 4 April 2017
78. Deputy Michael McGrath asked the Minister for Finance his views on the possibility of the credit union movement providing funds for investment in social and affordable housing; the engagement that has taken place to date between the sector and his Department; and if he will make a statement on the matter. [16416/17]
Amharc ar fhreagraI am pleased that the credit union sector is considering various proposals to increase its income and develop its business model. My Department has received a number of such proposals from both the Irish League of Credit Unions and from the Credit Union Development Association. Proposals from both representative bodies, in relation to the funding of social housing, are at various stages of development. While the Department of Housing, Planning, Community and Local Government is the Department primarily responsible for the formulation and implementation of policy and for the preparation of legislation in relation to housing, any such proposals would require approval of the Registrar of Credit Unions at the Central Bank before they could be implemented.
The Central Bank has informed me that it has received information regarding proposals for credit unions to provide funding for social housing and is currently engaging with the sector on those proposals. It further stated that while it does not comment on specific proposals, such investments could be facilitated by future regulations made by the Central Bank, where appropriate. The Central Bank also stated that it is willing to consider the type of regulations that would be required to facilitate such proposals. However, the Central Bank's key consideration in evaluating such proposals is its statutory mandate to ensure the protection of members' savings by credit unions and to ensure the well-being of the sector generally.
Officials from both my Department and the Department of Housing, Planning, Community and Local Government have met with the representative bodies on a number of occasions to examine how credit unions can assist in the area of social housing. Officials from both Departments have also met with the Central Bank. Separately, communication is ongoing between the Department of Housing, Planning, Community and Local Government and my Department.
On 1 January 2016 I commenced the final sections of the Credit Union and Co-operation with Overseas Regulators Act 2012 (2012 Act) following discussions with credit union representative bodies. Following commencement of the legislation, the Central Bank introduced the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016, regarding a number of areas including savings, borrowing, lending, investments and liquidity.
Investment regulations made specific reference to section 43 of the Act and to further classes of investments in which a credit union may invest its funds. The regulations provide that investments in projects of a public nature include, but are not limited to, investments in social housing projects. The Central Bank will review the investment regulations for credit unions, including a public consultation, in 2017.
Notwithstanding any potential changes that may be made to the regulations, the legislative requirement for credit unions to ensure investments do not involve undue risk to members' savings will remain the overriding factor which must inform all credit union investment decisions.
