Thursday, 14 February 2019
Ceisteanna Eile - Other Questions
Credit Union Lending
7. To ask the Minister for Finance the steps he is taking and the progress made in establishing a mechanism that would allow and facilitate funds from an organisation (details supplied) be invested in social housing; and if he will make a statement on the matter. [7150/19]
This question concerns the Irish League of Credit Unions, ILCU, which has put in place a mechanism which would enable funds held by the ILCU to be put to good use for social housing through approved housing bodies. Can the Minister provide an update on that to the House?
This is a question that has been asked, and answered, many times. I last answered it in the Dáil last October and my colleague, the Minister of State, Deputy English, also answered it during oral parliamentary questions a few weeks ago. Each time, it has clearly been stated that the Government is not and has never committed to establishing a special purpose vehicle, SPV, on behalf of the organisation mentioned by the Deputy. There has been extensive engagement from my Department and the Department of Housing, Planning and Local Government with this organisation since 2015. Following analysis of its two proposals and meetings with the organisation in question, both Departments stated in writing that the second of the proposed models, the establishment of an SPV by credit unions, was the most suitable. In July 2016, Rebuilding Ireland separately committed to establishing an innovation fund to support the development of innovative financial models. It has been repeatedly clarified both in writing and indeed in answers to parliamentary questions that this commitment was not to establish a State-owned SPV, but rather to provide funding to help develop a sector-led approved housing body SPV.
In respect of supporting credit unions in the provision of funding for social housing, the role of the Government and the Central Bank is to ensure there are is an appropriate legislative and regulatory framework. In this regard, the Central Bank has now revised the credit union investment regulations to enable credit unions to invest in social housing via an SPV.
In summary, the Minister is saying this is not an issue for his Department or the Department of Housing, Planning and Local Government. There is no ongoing body of work being undertaken in this space. My understanding of what the Minister of State, Deputy English, said was that by the end of the first quarter of this year, work would be completed to facilitate the SPV that we have spoken about. The SPV would be developed, as I understand it, by the Irish Council for Social Housing and the objective was to facilitate the use of funding for the development of social housing by approved housing bodies. The Departments have a role in facilitating that. The Minister of State was certainly giving a commitment that work will be done in the first quarter of 2019. I would be grateful if the Minister could clarify that matter. Will the SPV, if and when it is established, meet the regulatory requirement of the Central Bank in respect of credit unions?
In response to the Deputy's second question, it will have to meet the regulatory requirements of the Central Bank in respect of the operation of credit unions. It will have to do that. In respect of the work of the Minister of State, Deputy English, which the Deputy touched on, maybe it is the case that the Minister of State was referring to specific areas of housing policy but I would have to check that. Certainly from our point of view, we now believe there are no barriers remaining to the set-up of this fund. The responsibility and initiative now needs to come from elements in the credit union movement to see if they actually want to go ahead and do it, which I believe they do. For the Deputy's interest, on Tuesday afternoon I met all the credit unions in the Department of Finance and had what I think they felt to be a productive meeting on a lot of different matters. I meet them collectively in the Department on a relatively frequent basis and hope to meet them again in that format, where we had all unions and representative bodies together.
This is really important. Our credit unions have a track record up and down the country in respect of supporting communities. It is vital that we ensure that this process comes to a conclusion as quickly as possible. Would the Minster be able to indicate when we will be able to get this up and running so that credit unions can have the money made available to support housing?
To be clear, what I think the Minister is saying is that there is no ongoing work within his Department or the Department of Housing, Planning and Local Government of which he is aware which forms part of this objective of developing an SPV. As far as the Minister is concerned, the framework is there for the credit union movement to go ahead and do this. That is what I am hearing. I would imagine this issue was discussed during the Minister's meeting on Tuesday. Could the Minister clarify whether the issue was discussed then? Perhaps he could ask his officials to look at what commitments the Minister of State, Deputy English, has given that would be completed in the first quarter of 2019 and revert to us on that.
In response to Deputy Eugene Murphy's question, I cannot ensure this will happen because if part of our economy, credit union or banking sector decides it wants to participate in this, we can only do so much. In response to Deputy Michael McGrath, from the point of view of the Department of Finance, we now believe that we have done all we can to facilitate the set-up of such an entity. It now rests with those who have been calling for this entity to see if they want to go ahead and do it. The matter was not raised with me at the meeting on Tuesday. It was not brought up. On the point about the Minister of State, Deputy English, maybe I can explain what that deadline was. My understanding is that the Department of Housing, Planning and Local Government has now provided funding to the Irish Council of Social Housing to help see if it can develop the framework to which the Deputy referred. The Irish Council of Social Housing is now aiming to complete that project by the first quarter. Maybe the Deputy is referring to the work the Irish Council of Social Housing is doing rather than the Department of Housing, Planning and Local Government or my own Department. I reiterate to both Deputies that we now believe we have done all we can. The matter did not come up again on Tuesday. If there is an opportunity to be grasped - and there may well be - it now rests on those who have identified it to see if they can do it.