Official Report: Minutes of Evidence

The Chairperson (Mr O'Toole): I welcome Martin Fisher, who is the head of the Northern Ireland branch of the Irish League of Credit Unions (ILCU), and Gordon Smyth, who is the chief executive of the Ulster Federation of Credit Unions (UFCU). We are joined also by a third member of the panel giving evidence today.

Mr Martin Busch (Irish League of Credit Unions): I am Martin Busch, and I am president of the Irish League of Credit Unions.

The Chairperson (Mr O'Toole): Martin, we are delighted to have you. We are delighted to take evidence from the credit unions. This will be a very important evidence session for us. I invite Martin and Gordon to make some opening remarks. Then, as always, I will ask members to indicate if they wish to ask questions.

Mr Martin Fisher (Irish League of Credit Unions): Thank you, Chair and members of the Committee, for the opportunity to brief you today on behalf of the Irish League of Credit Unions. We welcome your inquiry into the Northern Ireland banking and financial services landscape, which comes at an important time for our sector and for the communities that we serve. Credit unions have a long and proud history in communities across Northern Ireland and have played an important role in providing affordable financial services to communities over the past 65 years. They have always been driven by a deep commitment to serving their members and to providing a safe and sound financial environment.

The credit union movement here is not just an alternative financial provider but an essential part of the financial ecosystem. We represent 246 affiliated credit unions across the island, with assets of over £20 billion. Eighty of those credit unions are in Northern Ireland, representing over 571,000 members and managing assets of nearly £2 billion. Almost 50% of credit union assets in the UK are in Northern Ireland. Our movement plays a vital role in promoting financial inclusion, community resilience and ethical finance throughout all rural and urban areas. From the young parent who needs £500 for back-to-school costs to the family who need £20,000 to buy a new car, from the individual who gets their benefits paid directly into their account to the young entrepreneur who wants a loan to buy stock for the gym that they want to open, we support communities in many different ways, not only by lending but by supporting organisations and individuals through scholarships, sponsorships and grants.

Our movement is about Derry credit union, which set up its own Santa grotto for local families because it was so expensive to go to the local shopping centre at Christmastime. It is about CCU credit union, Newington credit union and Ormeau in Belfast, which offer bursary schemes to students. Newry credit union has been bringing relatives home for Christmas. There are credit unions that talk to schoolchildren about the importance of savings. The Teachers' Credit Union promoted a payroll deduction for staff through colleges. They have small but important impacts at community level across the North.

I will point out some facts from our written submission. Each year, we provide around 50,000 loans of under £1,000 across Northern Ireland. The loans help individuals and families to manage their daily, weekly and monthly financial situation in many ways. Banks will not offer a loan of that amount; in many cases, the minimum loan that they will agree to is a much higher amount of £2,000 to £5,000. The only options for people then are an overdraft, for which interest rates average 39%; a credit card, which could also have an interest rate of 30-odd per cent; or a high-cost lender, where the interest rate could run into hundreds of per cent. The £1,000 loan with a high-cost lender that you see on TV at lunchtime will, over 12 months, cost a total of around £1,630 in repayments. In one situation that I looked at yesterday, it would cost £2,000 over a year. The same loan from a credit union will cost interest of £70, and there is a good chance that an element of that £70 will come back to you via an interest rebate. With our credit unions, the loan is insured, which means that, in the event of the member passing away, the loan is automatically paid off. As we set out in the written submission, compared with even a modest high-cost lender, we estimate that we save members over £30 million in interest annually.

As the Committee will be aware, the banking landscape in Northern Ireland has changed significantly in recent years. The withdrawal of high-street banks and limited access to cash services have left many individuals and small businesses struggling to access basic services. Where possible, credit unions have stepped in to fill the gap, often at their own expense, offering services, savings and loans, facilitating government payments and, in some areas, supporting local businesses with cash lodgement services. However, we are not banks, and we face challenges in continuing to provide those services. We pay substantial fees to access banking services and clearing houses and to provide payment services to members. We are then left in the tricky position of weighing up whether we should charge members additional fees or take on those costs ourselves. That has an impact on the potential surpluses that can be returned to our membership. Our counterparts in Great Britain have benefited from significant investment that we have estimated to be in the region of £190 million over the past 15 years, and that continues. Unlike them, we have received little to no financial support in Northern Ireland.

The Chairperson (Mr O'Toole): Forgive me, Martin. Is that investment direct government support? If not, what form does it take?

Mr Fisher: There is a multitude of layers. There have been a number of projects, Chair, including a credit union expansion project of about £40 million. The dormant assets scheme that was set up in Great Britain is for financial exclusion. Here, it goes to the voluntary and community sector, whereas, in Great Britain, an element of that goes to financial exclusion. Obviously, the consequence of that is that a lot of it goes to community societies, including credit unions.

The Chairperson (Mr O'Toole): OK.

Mr Fisher: To build on that, I highlight the fact that, unlike post offices and rural ATMs here, credit unions pay rates. From an ILCU perspective, we paid £710,000 in rates last year. In addition, Great Britain recognises the role that credit unions play, and exemptions are made in respect of business rates. The same recognition has not been afforded here.

At the heart of our submission, we urge the Committee to recognise the essential services that credit unions provide in Northern Ireland's financial services sector; to ensure that policy, regulation and legislation reflect our unique community-based model; to support modernisation and digital transformation, helping credit unions to invest in solutions and expand their product offerings; and to understand that the lack of a financial inclusion strategy for Northern Ireland harms society here.

This year, 2025, is the International Year of Cooperatives and is the moment for Northern Ireland to embrace cooperative finance as a cornerstone of a fair and inclusive financial system. We stand ready to work with the Assembly, regulators and policymakers to ensure that credit unions can continue to serve their members and remain a key pillar of services here. As we set out in our written submission, credit unions are here to stay, and their role in the provision of financial services and, importantly, in financial inclusion must not be overlooked.

I appreciate your time today and look forward to engaging with the Committee.

The Chairperson (Mr O'Toole): Thank you very much, Martin.

Gordon, we will hear from you now.

Mr Gordon Smyth (Ulster Federation of Credit Unions): The Ulster Federation of Credit Unions is a much smaller organisation than the Irish league, but we work closely together, and our colleagues have given us a lot of help as we have gone along, particularly in the past 10 or 11 years, when we have tried to change a lot of things in the credit unions. I am really pleased that we have the opportunity to engage with you, because we want to share a number of issues with you and hear your take on them.

The federation has been in existence for only about 35 years. We have 37 credit unions across the Province. Most of them are still run by volunteers and may operate for one or two hours a week, but they are important to their communities. My background is in banking. I well remember that, in 2008, when the whole banking system seemed to be collapsing, it was credit unions that kept the economy going at local level. One reason why, when I had the opportunity to leave the bank in 2012, I got involved on the credit union side was that, for the first time, I could get an understanding of what was going on.

Although many of our volunteer-led credit unions are open for only a couple of hours a week, they know the local people. They know what is going on in the country and what needs to be done. Where banks have been cut down to so few branches, the people affected are those whom the credit unions seem to come and help. That is what we are trying to do.

We have nine or 10 larger credit unions with the IT in place to enable people to get their money out 24/7. Unfortunately, we do not have the resources to take all our members forward as we want to. We want them to be able to get funds 24/7 — young people expect that — but, up to now, we have not been able to get the IT funding that we have tried for.

By way of overview, we have approximately £97 million in the affiliated credit unions in the federation, so you can see how small we are in size and in shares. Our outstanding loans are for approximately £21 million, and our capital asset ratios are strong — much stronger than our regulators require.

I will highlight one thing at this stage, if I may. We have noticed that, in the past number of years, £180 million has been given by Scotland, England and Wales to their credit unions to help them to develop. For whatever reason, that money has not come to Northern Ireland. That is strangling the federation and organisations like ours, because, although there was a time when money was available — 20 or 30 years ago, maybe — the money is not there in the same way now. It is frustrating to see that, across the water, £190 million — I said £180 million, but £190 million is my understanding now — has been given to credit unions over the past 15 years. We need to be able to survive. We need our credit unions to understand that they are getting help. The funding is not coming from anywhere, so, if you can use any influence with the Treasury and find out why that money is not coming here, it would be very much appreciated.

There are other things that I would like to answer questions on, perhaps, but I am conscious that you had asked for an introduction.

The Chairperson (Mr O'Toole): We will have lots of questions from the many members who will want to ask them. Please, members, indicate if you wish to ask a question.

First, thank you again for coming. Speaking not just for myself but at a party level, we are huge believers in the credit union movement. The credit union model is something that is very special about this region and this island. We can genuinely be extremely proud of its work, and we are grateful for what you do in all our communities. It is special, and we need to support it.

In part, we are having the inquiry to understand the financial services landscape, and the credit union movement is distinct in that. I will ask a few questions. Reflections from both of you are welcome, but I will start with you, Martin. What specific policy changes — there is probably a long list — would enable credit unions to do more of what you would like them to do?

Mr Fisher: The starting point is probably the fact that the legislation has not been updated since 1985. There was a little tinkering with it in 2016 — some members may have been involved with that in a previous Assembly mandate — to provide for the acceptance of corporate members. As we said in our written submission, uptake of that has not been widespread, and that is due to risk and balance factors and the capacity and resources of some credit unions. Our biggest credit union has nearly £120 million in assets, is open six days a week and has complete online and digital capability and 30, 40 or 50 staff. Our smallest credit union has £2 million in assets, opens on a Friday night and Saturday morning and is completely volunteer-led.

Therefore, there is a range of capabilities and capacity across credit unions.

Thanks to the previous Economy Minister, the current Economy Minister and the interim Economy Minister, we have been working with officials from the Department for the Economy to introduce legislative reform. We want to take the best bits of what has been happening in Great Britain. We have three statutory objects, meaning that we are constrained in what we can do with savings and loans. We want to widen that a little. In Great Britain, credit unions can now undertake insurance activities. If we could do that, we could provide holiday insurance when providing a holiday loan. Credit unions in the South of Ireland can do that. There is that side of things, and there is widening our statutory objects. We are discussing with the Department for the Economy how we might collaborate to provide SME lending or community lending. Recently, you had witnesses at the Committee talking about community wealth building. Community lending is also important to us, but the difficulty with that goes back to resources and capabilities. We are good at personal lending. SME and community lending is that little bit more advanced and complex, and, in some instances, it does not necessarily make sense for an individual credit union to do that. At the end of the day, legislatively, we are capped at making 10% of our loans to corporate members. We are asking for that to be 15%, which it is in the Republic of Ireland.

A credit union is currently caught in a catch-22 situation: it would potentially like to lend to corporate members or community organisations, but, if a credit union has a loan book of £7 million, the 10% cap means that it can loan only £700,000 to corporate members. Therefore, if it makes two loans of £350,000, it is at its cap already. It cannot really go out to the community and say that it is lending —.

The Chairperson (Mr O'Toole): A credit union is allowed to lend only 10%?

Mr Fisher: To corporate members: companies, partnerships or community organisations. You get to that maximum level quickly, and that has happened in the South. In the Republic of Ireland, organisations want to come to the credit union for a loan, but the credit union is in the unfortunate position where it cannot take on staff to cater for those loans, and it cannot advertise in its community either. It is very much a catch-22 situation, so we are working with the officials in the Department to see whether there might some collaborative way in which that can take place.

In the South of Ireland, collaborative finance takes place in the agri-lending sphere. There is potential for that. The difficulty is that our regulations, from the Bank of England, do not let credit unions invest in a company. Therefore, we could not set up what we call a "credit union service organisation" (CUSO), which would be able to do all the nitty-gritty analysis of the business loan side of things and reading accounts. We cannot set up such a company. We have had discussions about that with the Prudential Regulation Authority (PRA): what if it were to limit the investment so that a credit union would be exposed to only one pound in the company, meaning that it had limited liability? CUSOs are accepted all around the world in the credit union movement, and, as I said, there are now numerous examples in the South of Ireland. We would like to do something on that either in Northern Ireland ourselves or with our counterparts in Great Britain.

The Chairperson (Mr O'Toole): For the purposes of the rest of the evidence session, it might be helpful to briefly set out your legislative framework. There is the Credit Unions (Northern Ireland) Order, which is Northern Ireland-specific and is from 1985. That was not devolved legislation, because there was direct rule at that point, but it is, effectively, devolved. You have a separate regulatory framework from London, which is via the Bank of England.

Mr Fisher: I understand that, under the Northern Ireland Act 1998, the matter of credit unions was kept here as devolved. The credit union legislation in Great Britain is separate legislation from 1979. From the regulatory perspective, we come together under the Financial Services and Markets Act 2000. The PRA, part of the Bank of England, looks at the prudential side of things, and the Financial Conduct Authority (FCA) looks at the conduct side of things. That can cause a multitude of issues: with two regulators, there are overlapping issues. From our perspective, there is a certain proportionality, but we are increasingly being brought into lots of things that, through no fault of our own, are consequences of decisions made at bank level and are aimed at banks and larger institutions. That is an area of concern for us.

The Chairperson (Mr O'Toole): It is worth crystallising that. For credit unions in Northern Ireland, the legislative framework is both devolved and reserved, which is an interesting hybrid.

Mr Fisher: An illustration of that is that, in conversations that we have had with officials and regulators, the view from London has always been that we, as credit unions in Northern Ireland, can have legislative reform that is in parity with Great Britain but goes no further. A number of years ago, legislative reform in Great Britain introduced additional insurance distribution activities for credit unions. The Assembly was not sitting at that stage, so we asked whether we could tack on to the back of that. We were told that we could not, even though that had been part of the earlier discussions. That seems to be a democratic deficit, in that the credit union movement here is mature and successful.

On Gordon's point, from the ILCU perspective, part of the reason why we are talking about the £190 million now is that we probably have never asked for any money from the Government or state. We look around and see what is happening in Great Britain and that our counterparts in the Republic of Ireland do not pay corporation tax. We paid almost £4·5 million in corporation tax last year.

The Chairperson (Mr O'Toole): Are they not rated either? Did you say that they do not pay rates in the South?

Mr Fisher: I do not know what the situation is with rates. It is obviously a different system. There are peculiarities across the board, and we are stuck in the middle getting the worst of both worlds.

The Chairperson (Mr O'Toole): I address the same question to you, Gordon. I am sure that there will be some or a lot of overlap. Are there specific policies or interventions that you are interested in that Martin did not mention? You mentioned a couple in your opening remarks.

Mr Smyth: Martin is always good at sharing the legislation. We have not kept up to pace with it, so that is helpful.

The £190 million given out was spread over the three Governments in the last 15 years. Credit unions in GB got £190 million, and we got £20,000 in total. Something is wrong when members of credit unions in Northern Ireland are not getting any sort of help.

Look at volunteers. One of our weaknesses, in many cases, is succession planning and trying to get new people to come in. That is challenging. However, there are a lot of good people there as well. Unfortunately, those people are getting frustrated with what is happening.

The Chairperson (Mr O'Toole): The volunteers who are working —?

Mr Smyth: Yes. In many cases, they have been there for 25 or 30 years and have seen the development of their credit union. However, they come to a certain point, and, after 35 years of service, they are not just as keen to move forward. I have been at board meetings where there is a good mix of people, male and female, of all ages. However, when it comes to the decision-making, it is two or three people at the front who say, "This is what we do" or "We are not going to do that". The younger people then get frustrated. Going forward, we cannot afford to let that happen. We provide a really important community service, and we need help to get it to the next stage. That is really —.

The Chairperson (Mr O'Toole): Resources would help, in that they would help with things such as recruitment. You mean, bluntly, that you would like to recruit or train some younger board members.

Mr Smyth: We are trying to do that. We have advertised for them. We have successfully brought one or two into the bigger credit unions. However, people come in at a certain level, and the young people who come through now are much more mature and experienced and want to be given the opportunity to actually do something, rather than to be told, "You do not need to do that" and "We will look after that". It is a challenge for us, and we are continually working at it.

I will say one thing about what Martin said. As a body of credit unions, we have not just sat back and hoped that the world would change. We have tried to reach out by way of collaboration. Together, we contacted all councils in Northern Ireland to see whether they could be of assistance. The Mid Ulster District Council was the first to come forward and is keen and proactive. Others have other challenges. We continue to build those relationships. The councils can see the benefits that we give to the local community. At this stage, however, we need help to survive. It is as bad as that. I mean: £190 million against £20,000?

The Chairperson (Mr O'Toole): When you say "survive", Gordon, are you talking about survival in terms of increasing the deposit base of some credit unions, volunteers to keep the organisation going or both?

Mr Smyth: It is a combination of the two. As I said, in many cases, we have brought new people in. There are quality people. An awful lot of people who have taken early retirement want to give something back to their community, but the regulations that those people have to go through are challenging, which makes it difficult.

Mr Fisher: Succession planning is an issue for all voluntary organisations. The nature of volunteering has changed dramatically as a result of COVID and changes in society. In a credit union or financial services sense, you no longer turn up for a board meeting for one hour a month; it is at least 15 hours a month. That is a huge commitment. From a regulatory perspective, there is an increasing ask that we have specific skills on boards. Trying to get those skills from within communities and trying to get that commitment from people is difficult.

The Chairperson (Mr O'Toole): A blunt fact is that there is a trickle-down: because of Lehman Brothers, people, including volunteers, have to do more training. That is understandable, but it has an impact.

Mr Fisher: One of our regulatory burdens is something called the "senior manager regime". We have to comply with a complex fitness and proprietary regime. Last month, the CEO of the FCA asked the Prime Minister what he would do to reduce the regulatory burden and increase competitiveness. One of the proposals is to remove elements of the senior manager regime. We have been clear from the start that credit unions should never have been part of that.

The Chairperson (Mr O'Toole): Maybe certain organisations should not have it removed, and certain others should have it removed completely.

Martin, is there anything that you want to add? You are a long-time volunteer champion. Do you have anything to add on the question that I asked about key interventions?

Mr Busch: I do not know whether you picked up on what Martin said: nearly 50% of all of the assets in credit unions exist in Northern Ireland. Think about the big picture. There are many more credit unions in the rest of the UK than there are in Northern Ireland. Two credit unions in Glasgow and Edinburgh received a massive — absolutely massive — cash injection to improve their IT systems. We received diddly-squat. Our members paid for every piece of technology that has helped credit unions through their journey since the financial crash and since COVID, which accelerated all of the IT structures. Our members did not get a penny from the credit unions while they built up the structure that was able to support members without people having to go into premises.

Mr Fisher: Martin talked about the Scottish experience. Last January, three credit unions received about £800,000 for operational resilience from the Scottish Government without even asking for it. The Welsh Government gave £600,000 to credit unions last year for IT expenses. Those are examples of —.

The Chairperson (Mr O'Toole): Financial support, yet credit unions are a much bigger part of the economy and communities here.

OK, I will bring members in now.

Ms Forsythe: Thank you very much for coming. It is really interesting to hear all of this.

I will ask about the corporate membership of credit unions. We hear time and time again in constituencies — we have had some evidence to the Committee about it as well — about the challenges that larger companies, smaller companies and voluntary and community sector organisations face with their banks when it comes to governance, and, sometimes, the accounts of voluntary and community sector organisations are frozen. You seem to be a more user-friendly option. What level of membership do you have from those organisations? Why is it not as high as it could be? Is there anything that we could do to improve that or to give people more access to their own money?

Mr Fisher: Deputy Chair, the Northern Ireland Council for Voluntary Action (NICVA) set it out succinctly in previous evidence that it has to do with the issue of the capacity, resources and size of the credit unions, so it is not a case that the credit unions would not like to do it; it is a question of cost, expertise and the resources to do that on top of the other side of things. From our perspective, you find it in the medium-sized to bigger credit unions. They are taking on those in their communities. There is an appetite for it, no doubt, and there is probably frustration that they cannot do more, but the other side of it is balancing risk. The deposits side of things is OK, but we have to be careful with lending. We have to be sure. Ultimately, it is our members' money that has to go into that. However, there is no doubt that we would like to be in the position where there would be a consistent offering in that respect from a lot of our credit unions.

There is a concept that has come into the South of Ireland now through legislative reform that allows for the referral of members. The concept behind that is that, if you are not in a position, in a small credit union, to offer corporate accounts, you can refer the member to another credit union that might be able to offer that. There are regulatory hurdles, issues and, I suppose, guidelines and rules that need to be made in the Republic of Ireland in order to make that come into play. That is trying to bring it into that realm of, if you are a small credit union or a credit union that does not want to offer its services but you have someone in your community who needs that service, how do you solve that problem? That is part of what they are trying to do in the South of Ireland. To the point, Chair, we would like to take the best bits of what happens across these islands and put it into a Northern Ireland solution.

Ms Forsythe: It definitely seems that we have specific circumstances here, and we had really good evidence from NICVA to the inquiry on a lot of this. Certainly, the organisations that I see using the credit unions seem to have a more flexible use of their money.

Mr Fisher: You must also remember that we, as credit unions, are also clients of banks, so sometimes we face the same difficulties in terms of compliance and issues with beneficial ownership and changes from an anti-money laundering (AML) perspective. We sense those frustrations equally as regards our capacity. Where we have an advantage is that we have a direct line into the FCA or the PRA, where we can, potentially, resolve those issues more quickly than some of the voluntary organisations can.

Ms Forsythe: A key part of the inquiry is identifying for this matter that is not devolved — banking services — the specific issues for Northern Ireland. You outlined the proportion that we have in Northern Ireland compared with the rest of the United Kingdom well. There is a big demand for it here, and there definitely is a space for it. We also had it with the banking hubs. Banks were saying that the data coming back from those showed a different type of business activity in Northern Ireland from that in mainland GB. Businesses very much want local access to their banking hubs, to their cash. Is that your consensus across Northern Ireland?

Mr Fisher: We have had conversation with LINK in the past 12 months, and it gathers information on our behalf. We found that, until the past 12 months, LINK did not even know that credit unions existed in Northern Ireland, so there is probably an element of some of its data that may not take account of the fact that, in Fermanagh, a hugely rural area, people might have access to a credit union to pay services or to pay for things. LINK or the FCA were not necessarily taking account of those. They now understand the ability and capacity of credit unions, along with some of the restrictions that we have. There is no doubt that credit unions play an important role — again, not consistent as regards access to cash. In the written submission, I mentioned Coalisland Credit Union, which, when the Post Office benefit account closed, was able to accept benefit payments for 600 members. They are taking on the transaction fees associated with that. They are doing that themselves because they feel a need in the community to provide that service. They are not getting paid, and, to be honest, they are not getting any recognition from anyone that they are providing the service. That is replicated across a number of credit unions across Northern Ireland, day in and day out.

Ms Forsythe: I appreciate your saying that. I represent South Down, which is quite a rural constituency. That was my experience too with LINK and the banking hubs. In South Down, we have towns with multiple credit unions. It is very active, and then banks come in to set up a banking hub and do not necessarily understand the full picture of how financial services are delivered here.

Mr Fisher: That is exactly the point. When I was looking at it, we had a conversation with LINK. I said, "We do not have any credit unions there. You guys must have made an assessment and done that on purpose", and they said, "What are you talking about?".

Mr Busch: "What are credit unions?".

Mr Fisher: Yes, they said, "What are credit unions?". There is still an information gap. We constantly have to communicate that and bring our regulators in London up to speed on the peculiarities of Northern Ireland and the North in all its various senses, as well as all the issues from a legacy perspective that we deal with.

Ms Forsythe: Thank you. Hopefully, the inquiry and its outputs will help to build that bigger picture. It is a really important thing. It is a key objective that we have.

Mr Smyth: It is a key point, because you might sometimes question whether a lot of the data that comes from across the water is accurate. A credit union in Northern Ireland is a very different organisation from those in England, Scotland or Wales. As a consequence, we have had some situations. I will give you a practical example of a small credit union that was run by incredibly well-educated people who ran good businesses in their real lives. A church came to the credit union and said, "We want to borrow the money that the church needs". The credit union was going to give the church the loan that it wanted, which was £300,000. There was no risk whatever to the community, on the basis of the number of people who were giving guarantees that it would be fine. We could not touch it because the regulation about the 10% cap came in, so we could not come anywhere close to it. Being able to do that would have helped that credit union an awful lot and even raised its profile to a degree in that area, but it is about keeping the credit union going. If it was a one-off loan, you could see the difference. If it is a one-off and you do not follow it up, we are missing out on things as a consequence.

Mr Carroll: Thanks to everybody who presented and to the whole credit union movement. In particular, thanks to the Clonard Credit Union, of which I am a member, and its staff and volunteers. There were really interesting points.

I have a couple of questions for either Martin or Gordon, whoever is best placed to answer them. The democratic nature of the credit union movement is vital. There are AGMs at which members can discuss things, look at books and ask questions. Some banks could take a leaf out of your book and adopt those policies, especially given the fact that we are seeking information from them that is not forthcoming.

Can I get a bit more information and clarity about the 10% cap? Is it the case that 90% of lending by the credit union movement is to members and 10% is to outside organisations? Have I got that correct?

Mr Brett: They are still members.

The Chairperson (Mr O'Toole): They are still members. You have to be a member to

corporate members.

Mr Carroll: The corporate members are still members.

The Chairperson (Mr O'Toole): They are corporate members rather than individual members.

Mr Carroll: OK. All lending is to members, obviously. No lending goes outside the North or the membership. Will you give us a rough sense of who the corporate members are? Are they churches and small businesses? What organisations fit in that category of corporate members?

Mr Smyth: When the legislation came in, we did not have the expertise at local level to bring in the documentation that was needed. We provided that for our credit unions. We find that it is not companies or businesses that are coming in but local organisations, football clubs and rugby clubs — you name it. Those are the people who are bringing in their accounts.

We cannot look at a business account coming in. A credit union might only be open for couple of hours a week, and the members have to be looked after first and foremost, otherwise there would be a queue out the door and down the street. That is one of the restrictions. Until we expand the organisation to take that on board, I cannot see it being fixed. There is clearly a need for that at local level, because the local people are trying to keep their communities going. That is why we have such a key role to play in that and why it is so important that the funding comes across from GB. It is not coming across at the moment, and it is really strangling us as an organisation.

Mr Fisher: From our perspective, in the main, it is local community organisations. As Gordon pointed out, the membership includes soccer, Gaelic and rugby clubs. It could be crèches, nurseries or anything like that. We see companies and partnerships, for example, in Mid Ulster, where more small companies will do that. In areas like south Derry, where the banks have withdrawn, some corporate members have taken membership because they can deposit money, and it saves going to the next big town if they do not have the time or resources. As I set out in the written submission, it means that the credit union has taken on the transaction costs, as well as cost for the security and transport for the cash. It is a mixture at this point, and there is probably a fear factor for some credit unions about taking that on because we are not going to replicate business banking. It is more a case of some credit unions offering specific cash deposit services in the community. The companies want to be members of the credit unions or take loans because of the corporate social responsibility perspective. It is a bit of a mixed bag, to be honest.

Mr Carroll: Thank you. That was useful. Credit unions pay £710,000 for rates, if I have got that correct. Presumably, credit unions cannot avail themselves of industrial derating.

Mr Fisher: We have the small business exemption, but we have nothing else. For example, over the COVID period, businesses got £15,000 as part of a grant scheme, and 23 credit unions were not able to avail themselves of it because their rateable value was more than the de minimis that was put in place. When we engaged with some of the Departments, we got nowhere. It was a disappointment, because, in many of those cases, the credit unions were smaller and in inner-city areas, but, because the rateable value of the buildings was so high, they did not access the £15,000.

Mr Carroll: Yes. Is that why credit unions pay corporation tax? Credit unions avail themselves of the small business exemption but also pay corporation tax.

Mr Fisher: We pay corporation tax on our investments; we do not pay it on the loan income. Credit unions have income only from lending to members, and that is restricted by a statutory cap of 1% per month, which is about 12·68% per year. Credit unions do not pay corporation tax on our lending income, but we pay it on our investment income. Obviously, interest rates are a bit higher at the moment, and credit unions are paying a bit more corporation tax. In the Republic of Ireland, credit unions do not pay corporation tax on anything.

Mr Carroll: That is useful.

Finally, the fact that you have saved people from paying £30 million in interest speaks volumes about what you do in the community. From reading the figures in the briefing paper, I see that 1 in 4 of the population is a member of a credit union, which is quite high, and it would be higher if only the adult population was counted. Martin touched on the FCA's lack of local knowledge in his briefing paper: can you expand on your experience of the FCA? Do you feel that it does not properly understand the sector or is not in a position to effectively monitor the sector?

Mr Fisher: If the entire credit union movement across the UK were to collapse tomorrow morning, it would be a minor inconvenience as part of the bigger, wider financial services sector. We —.

The Chairperson (Mr O'Toole): Are not systemic.

Mr Fisher: Yes. Whereas, in the South of Ireland, we are probably the fourth biggest bank collectively.

The credit unions have a good relationship with the FCA and the PRA. I can provide two examples. I was on a call with the chairs of the FCA practitioner panels last December, and the FCA now has a Northern Ireland contact. I asked how they were getting on with the intelligence coming from Northern Ireland. The chairs of the FCA panels did not know there was an FCA person in Northern Ireland, and that is concerning.

The second example is from a PRA perspective. The credit unions would like to set up a social housing investment fund, and the previous Communities Minister had indicated that credit unions could be part of the solution as part of the housing supply strategy. In the South of Ireland, the Central Bank allows credit unions to invest in a central social housing fund. We estimate that we could have £100 million to £200 million to put into that pot. Money has been put into the South of Ireland, and houses are being built there. Our difficulty is that we cannot quite persuade London of the fact that credit unions in Northern Ireland have surplus funds that we want to put to good and productive use for social purposes. In Great Britain, a lot of the time, credit unions are being supported by local authorities through grant funding. There is a concept in their head that, on the one hand, credit unions are relying on central or local authority funding and, on the other hand, from a Northern Ireland perspective, we have surplus funds that we want to use to help government, housing associations or local authorities.

Those are two examples, Gerry, of the frustration.

Mr Carroll: Thank you.

The Chairperson (Mr O'Toole): Are you talking about surplus funds that you would like to put towards — can you crystallise that number?

Mr Fisher: They were only estimates. Credit unions in the South are collectively putting in maybe €50 million to €60 million at the moment. In a good interest rate environment, that is maybe not as attractive as it might have been a decade ago. There is no doubt, however, that credit unions want to play a role. We want to come together, put that money into a central pot and lend it to housing associations. If the Northern Ireland Housing Executive was demutualised and was able to borrow, we could borrow £100 million or £200 million from the credit unions. That is happening in the South of Ireland at the moment.

Mr Brett: Martin, Gordon, Mr President, good to see you all again. Thank you, again, for all the work that your organisations do. I am on the record as having said this previously, but it is worth reiterating that the credit union movement is a force for good in Northern Ireland, particularly in working-class communities across North Belfast, with Newington Credit Union and North Belfast Credit Union to name but two. Your organisations have important roles to play. The work that you and your volunteers do is hugely appreciated, so thank you for that.

Last year, we hosted an event here, talking about your policy manifesto — Gordon, you were there, too — and important policy suggestions. I had hoped that the legislative proposals in that, which the Minister talked about, would have gone out to consultation by now. I was told that it would be at the start of year, and we are now at nearly March, which is not the start of the year. Have you had any indication from the Department?

Mr Fisher: We got a communication from officials yesterday, and the next meeting will be in early March. To be fair, I think that, because we are going beyond what has happened in Great Britain, the regulators have a lot more questions. We have been involved in discussions with the Department to clarify those situations. It has been held up, I think, because we are breaking new ground with some of our suggestions. The FCA and the PRA have been asking a lot more questions. We thought that we were there around Christmastime, and further questions came back in early January, so we had to provide clarity for those as well. You would have to ask the officials themselves, but that is my understanding.

Mr Brett: That will then go out to consultation, hopefully, before the summer, with legislative proposals coming to the Assembly, maybe, early in the new year. Do you see any mechanism in that to include the financial support that you and Gordon have outlined?

Mr Fisher: Yes, potentially. We have just had a technology survey, and our credit unions told us what they need. We have some evidence on what that could cost as well.

Mr Brett: In relation to the point that you made about councils, Gordon, they should really be supporting your volunteers and community development and through rent support, which they may or may not be doing. Will you, at some stage, share with the Committee some of the responses that you have received from councils? Individually, we could then take umbrage with our relevant councils to see why their support [Inaudible.]

Mr Smyth: We got round most of them last year. As I said, Mid Ulster has been proactive, and we hope to reach out to the rest in the very near future. What has been restricting us is that, with the 37 credit unions that we have, we have a new chair who wants to change things quite considerably. As a consequence, we have an awful lot of one-to-one meetings going on at the minute. However, we still want to work with those organisations.

Mr Brett: Fair enough. For the benefit of Committee members, it would be worth sharing the manifesto that you had last year, which will be the basis of the proposed legislative change.

The Chairperson (Mr O'Toole): Yes, that would be helpful.

Mr Busch: I will address a point that you made about councils' involvement, and I will share some of my experiences across the UK. Most credit unions in the UK are supported by their council. Most have staff who are paid by the council, not by the credit union. Most have premises, which are council premises, so the rating thing does not come into it, even though they are zero-rated. It probably helps the council because they are zero-rated.

I am just painting a slightly different picture. It goes back to our political situation. Credit unions tried to stay out of politics. At council level, you obviously have to get involved in politics, and the act of staying out of politics has meant that we were left behind in all the activity that went on in councils. It is time to reopen the conversation and adopt credit unions as part of the community build-up of councils, which we are.

Miss Hargey: Thanks very much for your presentation. Part of what we are trying to look at is that focus on rebuilding the local economy and, as you say, how we can build an infrastructure that withstands economic shocks, whether the financial crash, COVID or Brexit. Credit unions play a key role in the local economy and in democratising our economy, and I am keen, as we move through the inquiry, that we look at that more. As you say, we are operating in a unique environment here in terms of the need, the demography and stuff, but it is also about looking at best practice North/South and east-west and how we can adopt that going forward.

Martin, you mentioned surplus funds in the written paper, and I want to ask about that. There is huge potential to unlock some of those surplus funds. It could be an engagement with councils. I know that Belfast, for example, is doing a housing-led regeneration scheme, working with DFC, the Housing Executive and the council in terms of public land. If you could marry some of that with investments from credit unions, there could be a really strong partnership and template. The regulation of this is in London, so how have those engagements been going? What can we do to pursue that or to work with you to get the message across?

There is another issue, and it falls into financial inclusion and exclusion. I know that it has been another frustration for you that nobody from the North is represented on the Financial Inclusion Committee. I know that a local MP has been trying to work with you in terms of the Chancellor there as well. There are ongoing issues because of our unique circumstances and need here. Is that fully understood and reflected, and how can we all work together to push in the right direction to see the changes that we want to see?

You have said in some of your evidence that there is also a frustration about the Assembly here putting that emphasis on financial inclusion and dealing with exclusion as well. Again, I am keen to hear your views or suggestions on what more we could do. Community wealth building is a key plank of this, and I am not surprised that Scotland has put additional money in, because it has a focus on wealth building. The Welsh Assembly is the same. I want to hear your views on what could be done to bring forward more support.

This is my last question on that. Capacity infrastructure — that ecosystem of support — is coming up as well. We need to ensure that there is a consistency of service that all the credit unions can at least retain across the board. You mentioned capacity and training a couple of times and attracting the talent. You also mentioned trying to provide a 24/7 service through a digital offering. Has that been costed? How much would it cost to support you to do that?

Mr Smyth: I will answer that. We have recent examples. It cost colleagues in the Irish League of Credit Unions £90,000 to get a system in place in Ballycastle. We have not got anything like the money required to do that. In England, Scotland and Wales, there is a drive to help the credit unions develop and move further. We cannot do that at the minute; we just cannot do it. We have another situation — the individual voluntary arrangements (IVA). We have tried to get those removed from Northern Ireland because I firmly believe that they should not be operating in Northern Ireland; they were never designed to be in Northern Ireland. We approached Treasury across the water on the issue but hit a brick wall. Credit unions in Northern Ireland are fully devolved. In order for the UK Government to legislate on devolved matters, the convention is that a legislative consent motion (LCM) is required from the Northern Ireland Assembly. I do not know whether you can do that to take it forward. At the minute, we are at a roadblock; we are being told that it cannot be done.

We have local communities. The strength of communities has always been that people look after each other: you developed and looked after one another, no matter what you needed. If you were in difficulty, your credit union was there to help. That is not like a bank, which takes the stuff off you. The community tried to look after you. We then had an influx of folk who did not have the same understanding of what we were trying to do. We are now trying to get back to protecting people, because, in a lot of places, people were effectively saying, "I've got debt here; I just want to walk away from it". If they had stayed with their local community, they would have been helped through it. They would not have all of the difficulties that they will have in the future if those things had been looked after properly. If you are going into an IVA arrangement, the person who is managing that is making a fortune, and the individual at the end of it all will suddenly find that they cannot get credit support going forward. It is important that people understand exactly what credit unions do and how we support people locally to help them in difficulties. We need help, and, at the minute, the legislation here does not enable you to move it forward. If you could do something, it would be much appreciated.

Mr Fisher: Deirdre, I will try to answer your questions in reverse. Gordon is right: £97,000 has been awarded to one credit union from the dormant asset fund, the lottery fund. We were told indirectly that other credit unions applied for that and were not successful. That was disappointing.

There is no doubt, from our perspective on the capacity side of things, that there will probably continue to be some natural rationalisation and transfers of engagement in issues relating to succession planning. Our credit unions, from a capital and financial position, are absolutely fine and have no issues. It is about the next generation of people coming through and supporting them. Our president is here. Part of the ILCU's strategic objectives for later this year and moving into next year is to put a national strategy across the island to attract directors and volunteers. We will work with universities and colleges. We see a role for some of the Departments. There are potential options regarding leadership in the Department for the Economy's SKILL UP programme and, maybe, the Institute of Directors (IOD) for executive coaching.

You also mentioned financial inclusion. There is no doubt that it is important; I mentioned it in the written submission. All of the other regions of the United Kingdom see financial inclusion as important. It has been missed from the Programme for Government here for a number of years. It is equally important in the South/the Republic of Ireland, where they are launching a national literacy framework and a national inclusion framework. Credit unions will be an important part of that. Yes, it is difficult. As I said, we have taken the eye off the ball with regard to the dormant asset scheme. About £100 million is going towards community finance in Great Britain and nothing here. Financial inclusion —

The Chairperson (Mr O'Toole): Northern Ireland has received money from the dormant assets scheme, but it has not gone to credit unions.

Mr Fisher: No. Apart from the £97,000 that one credit union, like any other organisation, had to apply for. The financial inclusion side of things — that is what the MP was helping us with — is a huge issue of concern for us and all our partners, be they public or third sector, because Northern Ireland was not even thought about in the considerations around that. I remember, at one stage, in conversation at with a high-ranking official, being told that the North was being represented by HSBC. When I told the official that HSBC has only one office in Belfast, they were surprised by that. Again, we are being overlooked on multiple aspects.

Miss Hargey: Has there been feedback from the Chancellor on the correspondence?

Mr Fisher: On the lending side, the CEO of the Consumer Council, whom you have had in previously, has just been appointed to one of the Financial Inclusion Committee's subcommittees on the lending side of things, which is great, because they are across all the issues. However, no one on the Financial Inclusion Committee itself is from the North/Northern Ireland, and, because of all the issues that we have talked about previously, that feels like a bit of a slight.

Your final question was about social investment. We have had engagement with Belfast City Council and with Derry from back before COVID. They engaged with the regulator at that stage, and we could not make the regulator any more comfortable with the fact that members' money has to be 100% capital-protected and guaranteed in terms of the investments. We could not get the regulator to be comfortable that lending to a local authority or a housing association in Northern Ireland was guaranteed in any way. Again, there is frustration there.

Miss Hargey: There is more work to be done on that.

Mr Fisher: Yes.

Miss Hargey: I have one last question to ask. You mentioned wealth building. DFC is leading on two pilots: one in the north-west, working with the Department for the Economy in and around Derry, and another in Larne. Are any of the local credit unions involved in any of that pilot work?

Mr Fisher: They have not been approached.

Miss Hargey: No? OK, thank you.

Mr Tennyson: I add my thanks for your evidence so far and for the work that the credit unions do in the community. I will not rehearse all of the positive comments that other members have made, but I associate myself with them.

Gordon, I wanted to return to your comments about the individual voluntary arrangements. Your written briefing mentions those as being a threat to the credit union movement. I accept your point that, often, debt management companies will be involved and will skim a bit off the top of repayments. Can you expand on what the specific threat to credit unions is as well as to the individual member? I am really interested in that point.

Mr Smyth: Yes, sure. I go back to what credit unions were when they were being set up. It was a very easy business model, in that you took in your members' savings and you lent that money out to members of the credit union. That has been the success that has kept credit unions going down through the years. The change happened when there was a lot of media advertising about people who could, basically, walk away from their debt. As a consequence of that, people did not necessarily understand what they were getting involved in. I am not talking about illegal stuff; I am talking about the stuff that was on television. People saw that they could walk away from their debt and be clear of it within five years. The person who was looking after all that was making a fortune from it, but it was not really helping the members. At the end of the five-year period, those people thought that they were debt-free, but they were not, because they could not apply for new debt going forward. That was the impact of that.

In the credit unions, we have been trying to encourage people not to get involved in IVAs. If they have difficulties at all, we ask that they do what we want them to do, which is, historically, what has made us a successful organisation. If you have difficulties, we will try to help you through those in whatever way we can. That is the big difference with us.

I mentioned that I worked in a bank. The difference in the bank was like black and white. In a bank, you got a loan or did not get the loan, and, if something was wrong, you had money locked off, and the decision was against you. In the credit unions, we have tried to help people through difficult times, and that is still the core of our being. People can come to us, see people whom they know and get help. The trouble is that, if you do not come to the credit union straight away when you have a difficulty, it can become more difficult for you. That is why it is important that we keep doing what we do, particularly at the minute, given the champions for vulnerable people out there. That is why the credit unions are there: to help those folk, whereas, before, the help was not there. That is the difference between the two.

Mr Busch: May I expand on that, Deirdre? Credit unions, you have to remember, were established for the members. The benefits that members got from a credit union were more than just being able to get a loan. Once they had savings in the credit union, if anything happened to them, those savings were doubled. If anything happened in between times, a certain amount was paid over to the undertaker to pay for any undertaking expenses, and any loan that they had would be written off.

When people go to get debts written off, they are told that all debts have to be on the table. Suddenly, their £800 credit union debt is on the table, even though it is not a problem. Therefore, they lose their membership of the credit union and all their insurances. All their savings, maybe £500, are sent to pay off the £800. Then, to be honest, for the sake of something small within a big picture, their savings are wiped out, their membership is gone and they will not be able to rejoin until they pay off the outstanding loan. Who is the winner in all that? Certainly, the member is not the winner.

Mr Fisher: What we see, Eóin, is extortionate fees being charged by some of the insolvency practitioners. Some charge fees that are multiples of the loan. Therefore, if you have a £10,000 consolidated loan, many thousands might be going in fees to the insolvency practitioner. By the time that we, as creditors, get any money, we might get as little as £1, and Martin made the point that that means that the member has lost their insurances and all the protections that come with those.

Another point to raise is that, on the insolvency side of things, we are often behind the curve of what takes place in Great Britain. We often see that changes in rates have taken place in Great Britain and are automatically implemented here. As far as I understand, we do not appear to be involved. When Great Britain changes rates or is changing something now, particularly things like the breathing space, which is yet to come in for the North, we do not appear to be part of the discussions at an early stage with Treasury. Just because something is taking place in Great Britain, it does not necessarily follow that it should take place in Northern Ireland. In many cases. it might be fine, but we are still not being involved as the Northern Ireland voice in the room with Treasury.

Another example is that we were in a meeting with the regulators and Treasury before Christmas. I happened to ask, "Is an official from the Department a part of this conversation?". Not one person in that room had thought to ask an official from the Department that has responsibility for cooperative and mutual legislation in Northern Ireland to be part of that conversation. They were talking about doubling the size of the mutual sector and things like that, but officials from the sponsoring Department were not in the room. I will call it out: it is a disgrace.

Mr Tennyson: That is really useful. You have really challenged my understanding of the IVA arrangements.

Mr Fisher: We have a paper, Eóin, — sorry, a couple of pages — that we submitted to departmental officials recently. We can submit that to the Clerk of the Committee.

Mr Tennyson: That would be useful to read as a part of the inquiry. There are companies that profit from the misery of people in debt. I understand that, if you are an individual who has debts with multiple organisations, you are struggling with mental health problems and you have had a change of personal circumstances or whatever it might be, it can be overwhelming to deal with individual organisations. It was quite jarring to see the idea that credit unions should be exempted, because I thought that that might make life more difficult for that individual. You have articulated why that is not necessarily the case.

I am conscious too, though, that there are good organisations out there, such as Christians Against Poverty (CAP) and others, that might be involved in some of those arrangements but are doing it for the right reasons. Teasing out our understanding of how it works differently for different individuals and the different organisations would be really useful. Thank you for that. It was really comprehensive.

Dr Aiken: Thanks very much indeed. Sorry that I was not here for the first part of your presentation. I have just a couple of things. I echo what everybody else said about credit unions. I declare an interest as an MLA who has pointed some constituents in your general direction for assistance and help. Thank you very much for everything that you do. I have three specific questions that are probably easily answered.

First, on the dormant assets funding, what was the application process for the credit unions? I understand that, in the GB context, there was assistance from local government in pushing that forward. What was the process? Did we push for it?

My second question is about training. I absolutely get the whole business about the FCA, the PRA and board training. Have we reached out to — I think that somebody alluded to this — the further education sector? I heard you mention the IOD. Across the voluntary sector, we cannot get volunteers, members of boards of governors or virtually anything nowadays because of the amount of work that they have to do. The training that they are given is, frankly, inadequate. Are we looking at how we can set up a bespoke training process, first and foremost, before people know what they are getting into so that we equip them with the skills to do it?

My third question is about the insurance issue, which intrigued me. Why do you want to get into the insurance market when other people are trying to get out of it? Who would back it? Where would the risk be held? It just did not quite fit in with the rest of the presentation.

I have just those three questions. Thanks very much indeed.

Mr Smyth: I will talk to the insurance one, because ours is the simplest. It shows you that, sometimes, the regulators can be helpful, and they really made a big difference in that one. Our colleagues in the Irish league have been able to provide that service for people for many years. The Ulster federation was never in a situation where it could do that. With our solicitor, a barrister, our representative, who was me, and the FCA, we managed to get to a situation where, for £10 a year, in the event of your death, your beneficiary will get £1,500. That is a good payment for people in difficulties. We would not have got it done had it not been for the help of Ciara Forde from the FCA. It shows you how regulators can be flexible when they need to be. They used their legal people and got those legal people to see it differently. At this stage, after four years, we have paid out £1·4 million to members.

On the cost, I remember the day on which we launched it. Shortly after that, COVID happened, and I thought, "We are going to be in trouble here straight away". However, the barrister who was involved in it — I forget his name; he goes all round the world — was keen to help us and give us his expertise, because he could see what we were trying to do, which was to help the members who were in difficulties. It has been a real success story for us.

We are not allowed to do insurance, so the money was paid out as a grant. It was done in a way that was acceptable to the regulators. What we have also done for a long time is that, if someone who has a loan dies, there is a payment of £5·50 per £1,000. That in itself is good, and we are able to pay that out quickly. The only cloud in the whole thing is that, if you have arrears, you do not get the arrears bit, but you will get the rest of it covered. We have tried to help our members as we have moved ahead. The benevolent side of things has been a big plus for us.

It is helping those who have been with us for 30-odd years, and they now see the benefit of it in how it can be passed on. That is the experience of insurance that I have had. If we can see other opportunities going forward, we will take them, but we do not have the funds available to do anything else.

Dr Aiken: So you are not specifically underwritten.

Mr Smyth: No, we are doing that ourselves on the basis that a member is paying £10 a year. For them to get a payment worth 150 years is a win-win for all, and that is what is what we are trying to do at the minute.

Mr Fisher: Steve, we have our own insurance arm, which is regulated by the Central Bank of Ireland.

Dr Aiken: That is what I was trying to get to.

Mr Fisher: The credit unions have a passport into the UK through the PRA. We have loans protection, savings protection and death benefit insurance. We were talking about the potential opportunities. If we sell a holiday loan, could we sell holiday insurance with that? Our thoughts on that at the moment are that, because we have that regulated entity arm, credit unions would be able to do something through that arm and would probably enter into some sort of relationship with some of the other insurance providers. Our organisation has the buying power of 80 credit unions, so we would be able to offer discounts that members may not be able to get through other avenues.

One of our success stories across the island is what we call our "star plan". All credit unions on the island come together to have things such as employers liability, public liability insurance, directors' insurance and fidelity bond insurance. Our buying power across the island — it has been complicated by Brexit — means that the credit union in Downpatrick has flood insurance. It is probably one of the few organisations in the town that will continue to have flood insurance. We have credit unions in Cork that will continue to have flood insurance because of that cooperative nature whereby we can come together and say to the market, "Hey, we are 249 credit unions, and we want to do that". That is where we see the opportunities, Steve, on that, but it would all be done through a regulated entity.

On the training side of things, I talked about the national strategy that we hope to do later in the year, working with colleges and universities and the likes of Chartered Accountants Ireland.

I will not lie: the dormant asset funding has been difficult. The successful credit union that got the money in the end had been rejected a number of times. It asked for a number of reviews and was rejected. It persevered, and I do not know whether it was through that perseverance that it eventually got it, but it has been a difficult process. Our difficulty as well is that, when applications to funders or grant applications are made by credit unions, funders look at our reserves and our accounts and ask, "You have several million in reserves. Why would you need any funding from a third party?". That is members' money, so we cannot touch that. Again, there is a lack of understanding sometimes from those funders.

Dr Aiken: With your indulgence, Chair, dormant asset funding is divvied up regionally, so Northern Ireland gets its proportion. You just do not seem to get the proportion that came out of it.

Mr Fisher: No. It was about £100 million, and then it was extended recently through some of the insurance companies being part of the dormant asset scheme, so there are additional moneys. We have conversations with our colleagues across the water regularly, and they talk about a £5 million pot here and a £5 million pot there, and those pots are going directly to credit unions across the water. Again, it is frustrating that there is nothing here.

Dr Aiken: I think that that is how the Scots got the money that was divvied out. It was like, "There you go. There is your money for your IT system". It was part and parcel of a wider scheme, and we got none of it.

The Chairperson (Mr O'Toole): I will correspond with you separately on the Brexit matter. No other members have indicated that they wish to ask a question, so I will draw the session to a conclusion. We have discussed a huge amount.

Thank you so much for your time, Martin, Martin and Gordon. Please follow up with any other information. I am sure that there are things that we have missed. Obviously, there is strong support for the credit union movement on the Committee and, I am sure, more broadly. You have given us lots of useful information on credit union reforms. If there is anything else that we have not covered — for example, on areas such as microbusiness support — please let us know.

Mr Fisher: There is probably one point. You have had the concept of a mutual bank come before you. We set out our view in the written submission. From our perspective, it is clear that the financial services landscape in the North/ Northern Ireland is different. Take Causeway Coast and Glens Borough Council, for example, which has seven or eight credit unions in the area. There are three or four times the amount of savings and loans in that council area alone as there are in the entirety of Wales. We and Wales are apples and pears when it comes to the concept of a mutual bank. We do not see a mutual bank as being viable in a Northern Ireland context. The community wealth building group's report, I think, stated that the concept was not backed in Northern Ireland. The Department of Finance looked at that in the Republic of Ireland and said that any support for the concept of a mutual bank should go towards the credit union movement.

The Chairperson (Mr O'Toole): Are you worried that a mutual bank might compete for your deposit base?

Mr Fisher: There may be a view that we, as credit unions, have nowhere to put our deposits and that we would put them all with the mutual bank. From a regulatory perspective, we could put some but not all of them there. There is probably the concept of credit unions being the poor man's bank and that, if you want a £500 loan, you come to a credit union but, if you want a £5,000 loan, you go to the mutual bank. A £500 loan from us earns us £16 in interest over six months but costs us, on average, £26 to administer, so we lose £10 of that £500. We have to have larger loans in order to cross-subsidise smaller ones; that is the only way in which we can do it. Although we welcome competition, it is difficult to see how the situation could be carved up in any way other than to our disadvantage. We would be back to being seen as the poor man's bank, although we are far from it.

The Chairperson (Mr O'Toole): Would you like to do more of the small business lending? You talked about increasing the ratio from 10% to 15%.

Mr Fisher: Yes. A number of our credit unions want to see that increased. We are probably doing some of the small lending to SMEs and sole traders. Before COVID, a BBC documentary looked at credit unions across Northern Ireland. What struck us was the support that they were providing for the SME community.

The Chairperson (Mr O'Toole): Having released you, we have dragged you back in, 'Columbo'-style, for "One more thing" — for viewers, that is an up-to-date pop culture reference. Lots of borrowers now bank online and may use alternative lending or new online banks. However, in places where traditional banks are leaving the high street, is it the case that the type of borrower who might be a bit more traditional and a bit less online no longer goes to one of the big four banks — I will not name them — because they have all gone from that small town or village and will go to the credit union? Is that happening?

Mr Fisher: Yes. We have had conversations with some of the banks, which, from a business perspective, in retrospect probably regret removing their services.

The Chairperson (Mr O'Toole): Ah. Has that affected their pipeline of customers?

Mr Fisher: Yes. They do not have a direct relationship with them any longer.

The Chairperson (Mr O'Toole): Lots of people told those banks that that would happen. They said, "If you lose the huge marketing potential of being on the high street and having a community connection, it will have a commercial impact on customer behaviour".

Mr Fisher: Chair, we referred to that in the submission. The British Business Bank published a report last year on SMEs' access to finance. It may be of interest to the Committee for that organisation to provide evidence.

The Chairperson (Mr O'Toole): One strand of the inquiry is around small business and microbusiness and what that means, so, if you think that there is any other written evidence that we would benefit from, please tell us. You touched on some of that in your evidence, but we would particularly like to hear about it, because we want to touch on it in our report. That would be helpful. If there is anecdotal evidence or data about the archetypal small business borrower who does not have a branch of a certain bank in a certain town but is going to the credit union instead, we would like to hear about that. Thank you very much.