Mr. Ed Farrell:

With regard to the 70% and the 100% figures, it would certainly not be the same if the capital advance leasing facility, CALF, disappeared and we were at 100%. It would not be as risky or the same as a bank or a credit union giving a 100% mortgage to an individual person, because there is the payment availability that guarantees 92% to 95% of the market rent by the local authorities or by an arm of the State. The rent is guaranteed and there is the step in, as the Deputy and I have mentioned. It would certainly not be as risky or as out there as lending 100% mortgages would be.

At the same time, I believe that while a 100% mortgage would be a bit far, it is possible there could be somewhere in between because if the value of property went down again, everybody would find themselves in negative equity again. This would not be so good because the accounting has to be reflected on balance sheets. If the stock of housing at the approved housing body level dropped substantially again, there would be minus figures in the accounts. This would not look right even if the houses remained rented and the rent was still coming in. It is possible that somewhere between 70% and 100% would still leave it safe but with some extra capital and investment for social housing by means other than approved housing bodies. I presume this is where the Deputy is coming from.

Turning to the roadmap or the path we have been on for the past two years, to be fair to the Irish League of Credit Unions and the approved housing bodies, early on we identified issues with three significant arms of the State. The Central Bank is the credit unions regulator and we operate in an environment that is highly regulated by the Central Bank. It is very prescriptive and rules driven, and had been long before any global financial crisis. We were never run on the principles-based system, rather it was always on the rules-based system. We have a very prescriptive rule book in legislation and in Central Bank regulation on what credit unions can and cannot do, on how much they can lend and for how long.

Very early on in the debate, or in the journey, we outlined that the first issue was that credit unions could not invest in a collective to do with approved housing bodies. They could only invest in bank bonds, Government bonds and bank deposit accounts. That was one issue on which we have worked and lobbied the Central Bank. We had Members in both Houses to help us do that. The consultation paper that issued in May looks like it is going to open the door to a first phase that could allow up to €900 million to go into tier 3. As a first phase, I believe it to be a good start. There is a commitment from the Central Bank to review that in two years to see if we are looking good and if the approved housing bodies are proving a good investment class for credit unions. The consultation paper issued in May and we started the conversation back in 2014, so it is there but it took a while and a lot of work by us and others to get that consultation paper.

It looks like in the next three months, by the fourth quarter, it will hopefully be up and running and we will be open for business.

The other arms we had identified were the Department of Finance and its role in looking after credit unions on behalf of the Government, and the Department of Housing, Planning, Community and Local Government in the context of housing and social housing. The capital advance leasing facility, CALF, and the payment and availability, P&A, agreements came out.

We have worked with the Departments on the special purpose vehicle also since the Rebuilding Ireland report was issued one year ago, as Deputy Cowen said. During the past year we have lobbied and pushed hard in this regard. We met the then Minister, Deputy Coveney. Before that, we met the then Minister, Deputy Alan Kelly, and recently we met the Minister of State, Deputy Damien English, to push them on the commitment in the report for the special purpose vehicle. As we understand it, they are to provide some support. The Rebuilding Ireland report states that "Support will be provided from this [innovation] Fund to an Irish Council for Social Housing (ICSH) [approved housing bodies] sector-led new special purpose vehicle, involving investors, including the Credit Union movement".

We have been meeting with the two Departments, as the second and third arms of the State in this context, and pushing hard since the end of 2014 and especially since the Rebuilding Ireland report was issued one year ago. The report contains a clear commitment and a clear sense of direction from the Government that it is going to make this special purpose vehicle, or sponsor it, for the approved housing body industry in order to create this fund. We have met PricewaterhouseCoopers, who they have engaged. The NTMA and the Ireland Strategic Investment Fund were also mentioned in the Rebuilding Ireland report as the other State agencies that could or would be asked to come in and help to administer the fund. Professional advisers, custodians and trustees, etc., must be employed by these funds to be compliant with their own regulations. All of those funds, and this one in particular, would be regulated by a funds division of the Central Bank, which is a different division from the credit union registry. It would be a regulated entity in its own right and would have to have professional advisers in the background.

Now that we seem to have the Central Bank door slightly ajar, or looking like it might be ajar later in the year, we will now have to increase our focus and push on to make sure the Departments come through for the approved housing bodies to have the fund so they can take in credit union and non-credit union money.