# The potential regulatory and legislative implications of credit union involvement in the social hous



## OMG-DMG (5 Feb 2016)

Minister Paudie Coffey:

"I and my colleague, Minister Alan Kelly, met with the Irish League of Credit Unions (ILCU) on 1 December 2015 to discuss a submission containing a proposal setting out a means by which funding could be provided to Approved Housing Bodies, by credit unions, for the development of social housing. My Department has since had a further meeting with the ILCU to address technical aspects of its proposal.

Conscious of the independence of the Central Bank in its regulatory role in respect of credit unions, bilateral engagement has taken place between my Department and the Department of Finance to consider the potential regulatory and legislative implications of credit union involvement in the social housing sector.

The Central Bank commenced a number of new regulations for credit unions on 1 January 2016. Prior to their commencement, following careful consideration, the Central Bank made a number of modifications including to Regulation 25(2) which makes reference to the fact that the Central Bank may prescribe, in accordance with section 43 of the Credit Union Act 1997, further classes of investments for credit unions which may include investments in projects of a public nature. The effect of these modifications is that regulation 25(2) now provides that investment in projects of a public nature can include, but are not limited to, investments in social housing projects.

I acknowledge the recent modifications made by the Central Bank and the willingness of credit unions to actively seek a role in financing the delivery of social housing. I look forward to the ILCU’s further engagement with the Central Bank on foot of the regulatory changes made and my Department will continue to engage constructively with the ILCU in relation to their proposal."
*PQ Ref: 4503/16, Wednesday 3 February 2016*


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## OMG-DMG (5 Feb 2016)

*Minister Michael Noonan:*

" As I previously advised the Deputy, 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 and that various options are being explored by the sector. My Department has received a number of proposals in relation to social housing. 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, Department of Finance officials are working closely with them.  While these proposals are at an early stage of development, a number of meetings were held with officials from both Departments to examine how credit unions can assist in the area of social housing.

I should point out that any such proposals are subject to the approval of the Registrar of Credit Unions at the Central Bank of Ireland who is the independent regulator for the credit union sector.

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, social, cultural or charitable purposes by a resolution passed by a majority of its members present and voting at a general meeting. Where individual credit unions intend to establish such a fund the Central Bank would expect the credit union to take account of the need to ensure the protection of the funds of its members.

Commencement of the remaining sections of the Credit Union and Co-operation with Overseas Regulators Act 2012 on 1 January 2016 provides the Registrar of Credit Unions with the power to make regulations in relation to investments in projects of a public nature. This is specifically referenced in legislation and therefore such investments could be facilitated by future regulations, where appropriate, when there are specific proposals put forward by the credit union sector.

Prior to commencement of the legislation, following consultation between the Department of Finance and the Central Bank during the course of discussion on CP88, the Central Bank agreed to a modification in relation to this matter. Regulation 25(2) makes reference to the fact that the Central Bank may prescribe, in accordance with s43 of the Credit Union Act 1997, further classes of investments for credit unions which may include investments in projects of a public nature. The regulation provides that investment in projects of a public nature include, but are not limited to, investments in social housing projects.

While the Government recognises the important role of credit unions as a volunteer co-operative movement in this country, the Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is absolutely determined to support a strengthened and growing credit union movement."

*PQ Ref: 3644/16, Thursday 28 January 2016*


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## Black_Adder (16 Feb 2016)

"..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, social, cultural or charitable purposes by a resolution passed by a majority of its members present and voting at a general meeting. Where individual credit unions intend to establish such a fund the Central Bank would expect the credit union to take account of the need to ensure the protection of the funds of its members.."
You can assume that some of the people in the Central Bank intent on wiping the movement out - have suggested this Section to the Minister.
This is so limited it amounts to a big zero. 
More of the nonsense 'regulations' were commenced in January.
When is anybody going to take this Central Bank on?
They stand idly by on the Variable Mortgage issue and then flatten Credit Unions.


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