Joan Collins (Dublin South Central, United Left)
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30. To ask the Minister for Finance the impact the proposals from the Irish League of Credit Unions to invest €2 billion for social housing will have on the balance sheets of the banks; and if he will make a statement on the matter. [40351/15]

Michael Noonan (Limerick City, Fine Gael)
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The credit union sector is aware of the need to consider ways of increasing its income and developing its business model. I am pleased that this topic is being seriously considered by the sector and that various options are being explored. My Department has received a number of such proposals. While the Department of the Environment, Community and Local Government is the Department primarily responsible for the formulation and implementation of policy and for the preparation of legislation in relation to housing, the proposal recently received from the Irish League of Credit Unions in relation to social housing funding is currently being examined by my officials. This proposal is at a very early stage of analysis. I understand however, that the proposal contains various examples of investment levels, of which the amount of €2bn is one example.

As per their respective H1 2015 financial statements, the combined funding from all sources at AIB and BOI totalled c. €186bn. Any outflows that may arise as a result of implementing such a proposal would therefore not significantly impact on the balance sheets of those banks.

Joan Collins (Dublin South Central, United Left)
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31. To ask the Minister for Finance his views on lifting, the crude and inflexible, lending restrictions imposed on credit unions. [40386/15]

Michael Noonan (Limerick City, Fine Gael)
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My role as Minister for Finance is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.

The Registrar of Credit Unions at the Central Bank is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members. As such the imposition of lending restrictions is a matter for the Registrar who recognises the need for credit unions to grow income as a requirement for sector viability and for the need for credit unions to ensure that they are in a position to grow their income from their traditional lending business.

I have been informed by the Central Bank that it has been necessary to put lending restrictions in place in credit unions where there are regulatory concerns and resultant risk to members' savings.

The majority of lending restrictions in place still enable credit unions to lend amounts in the range of €10,000 to €30,000 and the lending restrictions are reviewed on a regular basis to determine whether or not they are still set at appropriate levels.

In February 2015 the Central Bank commenced a lending restriction review initiative, whereby credit unions that are subject to a lending restriction, but are satisfied that they have made the necessary improvements and have embedded these improvements in robust risk sensitive lending practices, could apply for a review of their lending restriction.

The closing date for receipt of applications to review lending restrictions under this initiative was 30 September 2015.

The Central Bank further informs me that 59% of applications received have been reviewed. Of the applications which have been fully reviewed, 83% have had their lending restriction lifted and are now operating under the board's stated credit risk appetite. c.40% of credit unions that applied made their application in September. These applications are currently under review.

This review has reduced the number of credit unions with lending restrictions as currently approximately 39% of credit unions have a lending restriction compared with 52% at the start of the review process.

As indicated in the Central Bank consultation paper CP88, where credit unions can demonstrate improvements in their credit risk management practices in line with strengthened regulatory framework, it is anticipated that the use of credit union specific lending restrictions as a regulatory tool will reduce over time.