Credit unions could be allowed to invest in social housing following review

Central Bank consulting on changes to the investment framework that restricts credit unions at present

The Central Bank consultation paper seeks views from credit unions on whether additional investment classes are appropriate for the organisations. (Photograph: Colin Keegan)

The Central Bank consultation paper seeks views from credit unions on whether additional investment classes are appropriate for the organisations. (Photograph: Colin Keegan)

 

The Central Bank is consulting on changes to the investment framework for credit unions that could allow for investment in areas including social housing and new types of bonds.

Under existing regulations, credit unions can invest in a range of specified investment classes including government securities, bank deposits, bank bonds and collective investment schemes.

In an effort to ensure that investment regulations remain appropriate for the sector, the Central Bank undertook the review of these restrictions earlier this year.

The consultation paper seeks views from credit unions on the potential changes and whether additional investment classes are appropriate for credit unions.

‘Significant funds’

Responding to the publication of the bank’s consultation paper, the Credit Union Development Association (CUDA) highlighted the possibility that credit unions could help with the ongoing housing shortage.

“Credit unions have significant funds to invest and we are seeking opportunities to use these funds for the mutual benefit of their members and the wider communities” said Kevin Johnson, chief executive of the CUDA.

The Irish League of Credit Unions also welcomed the consultation, saying it had long campaigned for a review of the investment regulations. The ILCU was also positive on the potential for housing investment.

“Such a change in the current investment regulations would enable the credit union movement to provide significant funding to support the development of critically needed social housing,” the league said in a statement.

The consultation remains open until June 28th.