Ms Anne Marie McKiernan:

On the Deputy's first point about the community ethos, clearly, we strongly believe in it and the importance of the credit union sector to both the financial system generally and communities. We very much want to see it protected as we move forward. At the same time it is important to recognise that credit unions are dealing with some very difficult realities, some of which involves giving up local independence in return for staying part of the credit union movement into the future which may involve mergers with neighbouring credit unions. My understanding of the mergers that have taken place is that the vast majority of credit unions work very hard to sustain the community ethos. It oftens extends to keeping local branch offices open in the communities where credit unions have merged. Undoubtedly, it is a challenge as we move forward in terms of how credit unions can restructure and at the same time retain the same identity within the local community.

On the issue of arrears, we have not seen a very strong correlation between governance and arrears and size. With regard to governance, it has taken a period of time for the improved standards we expect which are set down in the new regulations to become embedded across the sector. Our requirements are proportionate. We only have a small number of required pre-approved control functions, for example, under the fitness and probity regime. Certainly smaller credit unions, in general, struggle with meeting all of the requirements and at the same time deal with their financial, structural and operational challenges.