A Programme for a Partnership Government recognises the potential role credit unions can play in dealing with our great housing difficulties. To that end, officials from my Department and the Department of Housing, Planning and Local Government have met with the credit union representative bodies on several occasions to examine how credit unions can assist in the area of social housing.
Following this engagement, the Central Bank undertook a review of the investment framework for credit unions in 2017. The outcome of the review led to the introduction of revised investment regulations, which allow credit unions to invest in tier 3 approved housing bodies through a regulated entity. As such, since 1 March of this year credit unions have been permitted to provide funding for social housing via a special purpose vehicle. This may facilitate a combined sector investment in tier 3 approved housing bodies of close to €700 million. Let us put this figure in context. As of the end of 2017 total lending from the Housing Finance Agency to approved housing bodies was about €356 million.
In supporting credit unions in the provision of funding for social housing my role and the role of the Central Bank has been to ensure there are no undue regulatory barriers. The Central Bank has now fulfilled its role and I have fulfilled my role in this regard. I look forward to seeing the credit union and social housing sectors progressing and developing any specific funding mechanisms for investing in tier 3 housing bodies. In particular, in line with the commitments in Rebuilding Ireland, the Department of Housing, Planning and Local Government has now established an innovation fund to support the development by AHBs of innovative financial models.