Michael McGrath (Cork South Central, Fianna Fail)
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43. To ask the Minister for Finance if he will consider an amendment to the legislation governing credit unions that would specifically allow them lend to approved housing bodies and local authorities for social and affordable housing; and if he will make a statement on the matter. [27552/16]

Michael Noonan (Limerick City, Fine Gael)
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The agreed Programme for a Partnership Government recognises the potential role that credit unions can play in housing finance and supports the efforts of the Registrar of Credit Unions at the Central Bank to gradually lift current lending restrictions as appropriate, including for housing. The Programme further provides that it will investigate with all stakeholders how credit unions can support the delivery of social housing.

The Department of the Environment, Community and Local Government is the Department primarily responsible for the formulation and implementation of policy and preparation of legislation in relation to housing

The Registrar of Credit Unions at the Central Bank is the independent regulator of credit unions. Officials from my Department and from the Department of the Environment have jointly met with the Central Bank to provide information of a technical nature regarding social housing funding arrangements and to consider the potential regulatory and legislative implications of credit union involvement in social housing funding. Regular updates on progress are received by my Department. from the Department of the Environment.

However, the lending framework for credit unions is provided for under section 35(2) of the Credit Union Act 1997 which stipulates that a credit union can only lend to its members. Section 17 of the 1997 Act stipulates that all members of a credit union must hold the common bond set out in the rules of the credit union. Section 6 of the 1997 Act sets out the objects of the credit union, one of those objects being the creation of sources of credit for the mutual benefit of its members at a fair and reasonable rate of interest.

On 29 June 216, the Credit Union Advisory Committee (CUAC) presented me with a Review of Implementation of the Recommendations in the Commission on Credit Unions Report. This Review makes many recommendations, one of which is a full review of lending and concentration limits, including the basis of the calculation of those limits together with the associated liquidity limits. Detailed consideration and a policy paper will also be developed on the Common Bond. It is intended that an Implementation Group is established shortly to ensure implementation  of all recommendations in CUAC's Review.