Mr. Philip Hosford:

We are happy with lending limits in particular areas, although there are certain areas where we would have reservations, particularly around the concentration of lending and how that is implemented. With regard to concentration of lending, the Central Bank may indicate that only a certain of lending can be in commercial or personal lending. We have no issue with such concentration of lending, as they are easy to implement. We have no difficulty with a straight restriction in a particular area.

It is different if the concentration of lending gets a bit more detailed and takes in a term like "per employer". There is a definition in the Credit Union Act 1997 of "family or connected party" and there have been previous issues with the Central Bank in the restriction of lending based on a connected party. There have been difficulties in that definition. To take the definition of a "connected party" in the Credit Union Act 1997 and implement a lending restriction based on it would be very difficult because it is so broad. It would take in a spouse, partners, first cousins or grandmothers. If the Central Bank imposed a restriction of lending on that basis, it would be very difficult for us to say that if a person's first cousin got a loan last week, the person in question cannot get one this week. There is a practical element in that regard. We have no difficulty in terms of restrictions on size or particular classes of loans. With regard to concentration, there is scope for a bit more thought to be put into the implementation on the ground.