Written answers

Wednesday, 3 June 2020

Department of Housing, Planning, and Local Government

Credit Unions

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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1229. To ask the Minister for Housing, Planning, and Local Government the remaining policy, legislative or regulatory obstacles that are preventing credit unions from being able to provide funding for social housing through investments in approved housing bodies; and if he will make a statement on the matter. [9102/20]

Photo of Eoghan MurphyEoghan Murphy (Dublin Bay South, Fine Gael)
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The Programme for a Partnership Government recognises the potential role that Credit Unions can play in housing finance and supported the efforts of the Registrar of Credit Unions at the Central Bank to gradually lift current investment restrictions as appropriate, including for housing.

Credit Union bodies have set out proposed means by which funding could be provided by the sector to Approved Housing Bodies (AHBs) for the development of social housing.  This follows on from the amendments introduced by the Central Bank to the regulatory regime within which Credit Unions operate. As such, since 1 March 2018, Credit Unions are permitted to provide funding, through a regulated investment vehicle, to Tier 3 AHBs for the provision of social housing.

My Department referred the Credit Union representative bodies to the Irish Council for Social Housing (ICSH) with a view to both sectors sharing, as far as practical, the benefits of their respective work in this area, including the work undertaken by the ICSH on the development of special purpose vehicles for social housing financing purposes. The work of the ICSH was supported by grant funding from my Department.  In addition, my colleague, Damian English, Minister of State for Housing and Urban Development,  and I have met with the Credit Union movement and the AHB sector on this matter. The Department of Finance has also met with the Credit Union representative bodies.

The ICSH, along with six Tier 3 AHBs, have worked with specialist financial advisors to establish a funding mechanism or vehicle which would identify suitable sources of non-state finance to fund the delivery of social housing by AHBs, based on best value for money. Market testing undertaken revealed good interest in lending to the AHB sector from various lenders including banks, institutional investors and the Credit Union sector. So far, one AHB has set up an SPV and several AHBs have sourced finance from private institutions. As such, the work in this area is ongoing and has led to individual AHBs establishing SPVs for financing social housing.

The Credit Union sector is one potential funder whose terms are assessed as part of the process of market testing to establish best value for money and optimum terms and conditions from lenders.  While my Department will continue to be available to provide any clarifications that may be required in relation to social housing delivery, it falls to the relevant parties, i.e. the AHBs, on the one hand, and potential investors on the other, to agree a workable and mutually acceptable approach in order to bring potential investment possibilities to a successful conclusion.

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