Mr. Kevin Johnson:

I will separate the questions because they raise two distinct issues, namely, social housing and the provision of mortgages directly to people. We have been advocating for six years that the credit unions should support social housing. This support would not be to the occupier but to the provider of the social housing, primarily the approved housing bodies, AHBs. Our preference would be for credit unions to individually or collectively lend for those purposes. That would have necessitated an enhancement to the Credit Union Act 1997 and in the absence of that, the Central Bank, to its credit, reviewed the investment regulations and enhanced them to allow for a facility where credit unions could invest into a regulated fund that in turn would lend on to tier 3 approved housing bodies. There is no active vehicle for that. All of the work has been done to see what would be required but the reclassification of the funding for the AHBs has meant demand for such projects is lacking. This is where the anomaly arises for us.

If a fund were to be activated, it would incur significant costs. If one is not going to get the projects because all the funding ends up on the State balance sheet - the Housing Finance Agency is already providing funds - there is not necessarily a motivation for the approved housing bodies to diversify their source of funding.

Our view is that this is all adding to the frustration. It still does not put houses out there or provide for social and affordable housing. We have explored many different mechanisms and, unfortunately, we are still talking six years later and still looking at balance sheets that have funds available for such necessary causes as social and affordable housing. We are persisting with this and we are not letting up. We are open to any opportunities that may arise to facilitate or work with it. In fairness, we have worked with the Department of Housing, Planning and Local Government and the AHBs. However, it may come back to the point that we may be better off having the facility to lend directly and broadening it beyond tier 3. It would also perhaps remove the necessity to have projects of certain sizes to make it economically viable. That is one aspect of the issue.

The other issue the Deputy raised has more to do with providing mortgages directly to the borrower, that is, the occupiers or owners of the properties. As we said, there are now facilities in place to support credit unions in doing this. The Central Bank's proposals for the revision of the basis of the lending limits will certainly help. Moving from a percentage of a loan book to a percentage of assets is a very welcome move. We have reservations about how credit unions can access the higher threshold of 15% of their assets. The only reason we have reservations is that the position is not transparent and we are not clear what it is. It is to be hoped this will be clarified in the feedback statements at the end of the consultation period.

I do not know if any of the other witnesses want to add to my comments.