Tommy Broughan (Dublin North East, Independent)
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173. To ask the Minister for Finance if his Department has met with the Irish League of Credit Unions to discuss the possibility of setting up a credit union supported, State-backed fund for social housing; if he supports such an initiative, in principle; and if he will make a statement on the matter. [39014/15]

Tommy Broughan (Dublin North East, Independent)
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174. To ask the Minister for Finance if his Department has met with the Irish League of Credit Unions to discuss the possibility of the setting up of a credit union supported, State-backed fund for small and medium enterprises; if he supports such an initiative, in principle; and if he will make a statement on the matter. [39015/15]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 173 and 174 together.

I received a document entitled The Social Housing Funding Proposal from the Irish League of Credit Unions (ILCU) on 22 October 2015. Officials from my Department are currently assessing the proposal. I am not aware of any proposal having been received by my Department from the ILCU in relation to credit unions lending to small and medium enterprises.

I have not met with the ILCU regarding these matters. However, officials from my Department are in regular contact with the credit union representative bodies and are always available should the ILCU wish to discuss such matters.

In relation to credit unions establishing such a fund, section 44 of the Credit Union Act, 1997 provides that a credit union may establish a special fund to be used by the credit union for, social, cultural or charitable purposes by a resolution passed by a majority of its members present and voting at a general meeting. Where individual credit unions intend to establish such a fund the Central Bank would expect the credit union to take account of the need to ensure the protection of the funds of its members'.

Commencement of the remaining sections of the Credit Union and Co-operation with Overseas Regulators Act 2012 (2012 Act) will replace, amend or supplement existing sections of the 1997 Act and will, in effect, remove some of the requirements (including limits) that currently exist in certain sections and will provide regulation making powers to the Central Bank. 

The power to make regulations in relation to investments in projects of a public nature is specifically referenced in legislation and therefore such investments could be facilitated by future regulations, where appropriate, when there are specific proposals put forward by the credit union sector. The Central Bank has informed me that, while to date no specific proposals regarding investment projects of a public nature have been received, the Central Bank is willing to consider such proposals including the type of regulations that would be required to facilitate such proposals.

The Central Bank has further informed me that it is open to working with the credit union sector to ensure that prudent and appropriate development can be facilitated within the regulatory framework. In its role of supporting the sustainable and prudent development of the sector, the Central Bank wants to ensure that any proposed changes to the business models of credit unions are prudently structured and implemented. In relation to development of the business model, as set out in the feedback statement on CP88 the Central Bank will be engaging interested parties in the credit union sector to participate in focused dialogue in the coming months with a view to gaining a better understanding of how credit unions want to develop their business model and to identify whether any changes are required to the regulatory framework to facilitate prudent development. 

Given the areas identified in feedback received on CP88 and through other engagements with sector stakeholders the Central Bank proposes that this dialogue will initially focus on the following areas:

- the services credit unions wish to develop in the areas of card services and payment accounts; and

- credit unions' aims regarding longer term lending including further developments on the provision of mortgages to members.

The Central Bank has informed me that it is also open to considering other areas of business model development.

An initial meeting with a number of credit union stakeholders, including the representative bodies and a number of credit union has been scheduled by the Central Bank. The Annual Information Seminars for 2015 will also take place from mid to late November and these will also provide an opportunity for the Central Bank to engage with individual credit unions and hear their views on business development.