Coveney commits to credit union funds review for social housing

The Government has committed to examine how multi-billion euro deposits held by the Irish League of Credit Unions could assist in the delivery of social housing.

A spokesman for the Department of Housing confirmed the inclusion in the Programme for Government of the commitment to examine “how credit unions can support social housing through voluntary housing services”.

The Programme for Government sets the timeframe for the move inside one year.

The Irish League of Credit Unions announced earlier this year it was prepared to provide a fund of up to about €5 billion to assist in the development of social housing.

The league offered to provide the funding by buying a Government bond, or through a Government designated “special purpose vehicle” which would have the effect of keeping the borrowing off State books.

The commitment to engage with the Irish League of Credit Unions and the Central Bank, whose sanction is required, comes as Minister for Housing Simon Coveney said he is prepared to look at radical ways to ease the housing crisis.

‘Bigger than Irish Water’

A spokesman for the Department of Housing said Mr Coveney views the housing issue as “bigger than Irish Water”.

Separately, Mr Coveney met with Dublin local authority managers on Thursday to discuss potential solutions to the housing crisis.

The inclusion of the commitment to examine the credit union deal follows meetings between the Irish League of Credit Unions and political parties as well as Independents as the Programme for Government was negotiated.

The league has also been meeting Approved Housing Bodies which are supportive of its plan.

On May 5th, former minister for the environment Alan Kelly told the Dáil that officials from his department and the Department of Finance had met Central Bank officials on the issue back in April.

“My officials met with the Central Bank on 21 April 2016 to provide information of a technical nature in relation to social housing funding arrangements. This was with a view to assisting the Central Bank in understanding how these arrangements operate, as it deals with issues arising from proposals put forward for credit union investment in social housing,” Mr Kelly said.

The league’s asset base amounts to some €14 billion in total, and the league is anxious that it be used to fund small and medium enterprises or social housing, but this needs specific approval of the Central Bank. A spokesman for the Central Bank said a comment would be forthcoming.

Additional contributions

The potential for the movement to make additional contributions towards the broader community through investing in social housing and small businesses is not only immense, but necessary for the greater good, league president Brian McCrory told the league's agm in Limerick recently.

The Central Bank said it could only say “discussions are ongoing”.

However, sources indicated approval from the Central Bank is not at all certain as the bank has yet to receive the level of detail it requires on the proposal.