The Irish League of Credit Unions has welcomed the announcement by the Central Bank that it will review investment regulations for the sector in 2017. The ILCU has been campaigning for a review of these regulations, particularly to allow some of the €8.5 billion held by its affiliated credit unions in surplus funds be used to fund government social housing projects. A move by the Central Bank to broaden the current investment classes permitted for credit unions could pave the way for such an investment.
In response to a government request in November 2014, the ILCU developed a comprehensive proposal outlining how surplus credit union funds could be used for social housing. In June 2016, the Oireachtas Committee on Housing and Homelessness then made a number of priority recommendations, including that Government should establish an off-balance sheet funding mechanism for social housing and should seek to mobilise as quickly as possible, all possible sources of funding, including funding from the ILCU.
Under the current investment regulations however, the credit union movement is only authorised to invest in Irish and EMU state securities, accounts in authorised institutions, bank bonds, investment in equities and collective investment schemes. Property schemes are however specifically excluded. A broadening of the collective investment schemes category could mean that investment in social housing would be authorised.
By enabling the allocation of some of these funds to social housing, credit unions could go a long way towards meeting the government’s €5.35 billion funding requirement to deliver 47,000 social housing units by 2021.
Credit unions stand ready and willing to assist in helping to solve the housing issues facing the country. Supporting social housing is not only a productive and sustainable use of credit unions’ excess funds, but will also address a key social issue deeply affecting the communities our credit unions serve.