Dáil Éireann Debate, Wednesday - 3 June 2020
91. Deputy Cian O'Callaghan asked the Minister for Finance the remaining policy, legislative or regulatory obstacles that are preventing credit unions from being able to provide funding for social housing through investments in approved housing bodies; and if he will make a statement on the matter. [9103/20]
Amharc ar fhreagraIn 2017, the Central Bank undertook a review of the investment framework for credit unions. On 1 February 2018, the Central Bank published amending investment and liquidity regulations for credit unions.
Since 1 March 2018, credit unions have been permitted to invest in regulated investment vehicles where the underlying investments are investments in Tier 3 Approved Housing Bodies (AHBs) for the provision of social housing. The Regulations require that investments by credit unions in Tier 3 AHBs must be made through a regulated investment vehicle. The maximum permitted investment amount per credit union is 50% of a credit union's regulatory reserves where a credit union has total assets of at least €100 million and 25% of a credit unions regulatory reserves for all other credit unions. These limits may facilitate a combined sector investment in Tier 3 AHBs of close to €700 million.
As such the Government and the Central Bank have fulfilled their role and it is now up to both the credit union and social housing sectors themselves to progress and develop any specific funding mechanisms. Notwithstanding the above, my Department will continue to engage with the credit union movement on appropriate mechanisms for them to establish a vehicle to invest in approved housing bodies.
I am also advised by the Department of Housing, Planning and Local Government that the Irish Council for Social Housing (ICSH), along with six Tier 3 AHBs, have worked with specialist financial advisors to establish a funding mechanism or special purpose vehicle which would source suitable sources of non-State finance to fund the delivery of social housing by AHBs, based on best value for money. Market testing undertaken revealed good interest in lending to the AHB sector from various lenders, including the credit union sector. So far, one AHB has set up an SPV and several AHBs have sourced finance from private institutions. The work of the ICSH was supported by grant funding from the Department of Housing, Planning and Local Government.
