Mr. Ed Farrell:

Credit unions have found the regulatory process and the relationship with the Central Bank to be very difficult. It has been 11 or 12 years since the credit unions began to be regulated by the Central Bank. As the crisis proved, the credit unions did not mis-lend or over-lend. That is clear because only a small number were in trouble during the crisis. They proved that they managed their balance sheets fairly prudently. Yet they have been subjected to a rather difficult and uphill regulatory environment and a particularly negative one.

Credit unions are in contact with us on a regular basis. We try to help them through the processes, debates, dialogues and meetings with the Central Bank. It has been a difficult relationship. Credit unions find that they are over-regulated. They were never subjected to light-touch regulation. Thankfully, I suppose, we came out of the other side of the crisis intact because of prudent management and appropriate levels of regulation. However, certainly in the past five or six years it seems to have become far heavier than it was. This was probably unnecessary, because we were managing our balance sheets and moneys in a prudent fashion. We bought in to it. We undertook risk, compliance, internal audit, strategic planning and fitness and probity work. All voluntary people now must subject themselves to testing in the Central Bank. Even the voluntary chairman of a credit union has to be interviewed by the Central Bank to take on the voluntary job as chairman of a credit union. That is a considerable journey that credit union people have taken. They have bought into it and they have taken it, but they cannot see the reward of developing a business model as the gain for the pain, as it were.