Maureen O'Sullivan (Dublin Central, Independent)
Link to this: Individually | In context | Oireachtas source

239. To ask the Minister for Finance to direct the Central Bank to develop a framework with the credit union movement to realise the potential of section 44 of the Credit Union Act 1997 for social housing initiatives at local level and for social, cultural and charitable purposes at community level; and if he will make a statement on the matter. [10662/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have been informed by the Central Bank that 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 such social, cultural or charitable purposed (including community development) where it is approved by a resolution passed by a majority of its members present and voting at a general meeting.

Funds established under section 44 do not require the approval of the Central Bank.

The Central Bank informs me that it is supportive of such initiatives by credit unions provided they fall within the provisions of section 44. These provisions include a requirement that funds paid into such a special fund can only be paid out of the annual operating surplus of a credit union and that no funds may be paid into such a special fund unless adequate provision has been made out of the annual surplus to cover all current and contingent liabilities and to maintain proper reserves and that the payment of the funds into the special fund will not affect the financial stability of the credit union. In addition section 44(3) specifies that the amount of funds which may be paid out of the annual operating surplus into such special fund shall not exceed 0.5% of the value of the credit union's assets.

The Investment Regulations set out in the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016, which were commenced on 1 January 2016, make specific reference to investments in social housing projects and indicate that the Central Bank may prescribe further classes of investments in which a credit union may invest its funds which may include investments in projects of a public nature and states that investments in projects of a public nature include, but are not limited to, investments in social housing projects.

Where an individual credit union intends to establish such a fund the Central Bank would expect the credit union to also take account of the need to ensure the protection of the funds of its members.