Ms Anne Marie McKiernan:

When we call for sectoral leadership, what we are really keen to see from the sector, be it from individual groups, their representative bodies or others, is a sense of the vision for taking the business model forward. That will then be aligned with business model proposals, be they on long-term lending, mortgages or other matters, and taken to us. That will address the sort of considerations we raise every day and which in our view are reasonable and to be expected. In respect of mortgages and long-term lending, an argument that is regularly raised is that long-term lending limits are impeding credit unions from developing their lending again. We would say there is significant available headroom, and I gave some of those figures earlier, and that represents an opportunity for credit unions, few or many, as decided according to their own risk appetite, to get into greater long-term lending and-or mortgages and understand all the risks and complexities in that process on which they can build. That would be a reasonable approach. Those limits have been in place for a period because it is recognised that this is a more complex business and that it will take time to build the capability and financial understanding to do that. That is an important clarification.

The second issue relating to long-term lending is that we are very keen to hear from the sector about what it thinks would be some reasonable upper limit. If the current upper limit is 15% over ten years, should it be 20%, 25% or 40%? Those higher limits represent a vastly different type of business model to manage compared with credit unions that specialise in smaller-scale personal and small business unsecured lending. Obviously, a roadmap of how to get to a different type and scale of transformed business model would need to be worked through. With our mandate to protect members' funds, one would not expect and we would not intend to lift limits and see what happens. We would prefer to and currently do engage extensively with the sector to understand its aims, what limits it feels are the appropriate future limits in the sector and how many credit unions are aligned behind that kind of aim. Is it to be for a very small number or for a much larger number? There are huge issues to deal with. I fully accept that this is a complex area but we want to ensure that as it is taken forward, it is done in an appropriately risk managed way. Nobody in this room wants to see credit unions make major losses on foot of proposals.