Michael McGrath (Cork South Central, Fianna Fail)
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49. To ask the Minister for Finance his plans to amend the Credit Union Act 1997 to enable credit unions to lend to approved housing bodies rather than invest subject to protections for members' deposits; and if he will make a statement on the matter. [46349/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware, new Investment Regulations for Credit Unions have only recently come into effect which have enabled the sector for the first time to invest in Tier 3 Approved Housing Bodies (AHBs).

The introduction of this new Investment Framework was the result of extensive engagement between officials from my Department, the Department of Housing, Planning and Local Government, the credit union representative bodies and the Central Bank on how credit unions can assist in the area of social housing, as well as a detailed review of the investment framework for credit unions by the Central Bank. This included a public consultation whereby the introduction of Tier 3 AHBs as a new investment class for credit unions was supported by the sector, as was the mechanism for facilitating such investments via a regulated entity.

The new Investment Regulations came into effect on 1 March 2018. Since this date, credit unions are permitted to provide funding to Tier 3 AHBs for the provision of social housing via a regulated entity. The maximum permitted investment amount per credit union is 50% of a credit union's regulatory reserves where a credit union has total assets of at least €100 million and 25% of a credit union's regulatory reserves for all other credit unions. These limits may facilitate a combined sector investment in Tier 3 AHBs of close to €700 million. To put this figure in context, at end 2017 total lending from the Housing Finance Agency (HFA) to AHBs was c. €356.5m.

The Programme for a Partnership Government recognises the potential role that credit unions can play in housing finance, and to that end I am supportive of the enabling regulations that have been put in place to allow credit unions to provide funding to Tier 3 AHBs for the provision of social housing. Given these Regulations only came into effect in March of this year following a consultation process which received 74 submissions (58 from individual credit unions and 3 from their representative bodies) and given the Regulations provide scope for a combined sector investment of almost twice the amount of loans received by AHBs from the HFA (as of end 2017), I currently have no plans to amend the Credit Union Act 1997 to enable credit unions to lend to Approved Housing Bodies rather than to invest in them.