Talking Credit Unions with Chris Smith

Can credit unions truly be the gold standard of ethical finance? Join our enlightening exchange with ethics-man Barry Clavin, as we scrutinize whether these institutions are walking the talk of their cooperative principles. We traverse the complex terrain of credit union ethics, addressing their genuine commitment to these values, and the potential benefits of adopting a unified ethical identity. Are there any lessons to be learnt from landmark policy of the Cooperative Bank. Barry sheds light on the strategic advantages such alignment could offer, setting credit unions apart in a financial industry often marred by scepticism. Step into the world of credit unions, where Louise Shields, at Claddagh Credit Union, describes the emotional bonds woven with members and community-centric values. She paints a vivid contrast to traditional banking models. We explore the manifestation of Hey Credit Unions ethical values through the experienced lens of John Smith, and how it reflects a dedication to a wide array of stakeholders. Mick McAteer's insights on economic and social justice underscore the importance of authentically presenting ethical standards to attract a diverse member base. Rob Harrison explains how the Ethical Consumer Association sees credit unions and emphasises the need to ensure the business is effective and efficient (to its customers or members) as well as considering an ethical dimension. Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

Listen to a conversation with George Hofheimer, the advisor and author of "Banking on the Human Scale." As we navigate the challenges that credit unions face in the digital era, George illuminates the path ahead, offering strategic insight into blending technological investments with the human service that defines credit unions. The traditional face-to-face service is not lost, but rather enhanced as George makes a compelling case for a harmonious merge of the old and the new. This conversation is an essential precursor to the upcoming Manchester Swoboda Credit Union Conference, in November, that aims to unravel the challenge of credit unions and their digital appetite. At the Swoboda Credit Union Conference, George Hofheimer shares his wisdom, this time focusing on simplifying operations in the digital era. George expounds on how credit unions can prioritise investments and redefine senior recruitment in the digital age. The digital transformation, laden with complexities, becomes less daunting as George guides us through. George gives us a taste on this digital landscape while retaining that unique human touch. Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

Several responses to this question by credit union leaders: *Rate tart is a term used in banking to describe someone who transfers balances repeatedly, chasing the best possible interest rates on savings. David McAuley, CEO, Donore CU, Ireland " Are our members 'rate tarts'* and leave the credit union, if we pay insufficient dividend? Our members in the main are not big savers. So, while there will be one or two members disgruntled with no dividend and they do tend to be in the “older” category and not borrowing. For the last few years due to the prevailing low interest (or zero rate interest situation), there has been no clamour for dividends. Also, the CBI has “encouraged” CUs not to give dividends. This year some CUs have distributed but they have needed to justify that decision". Karen Farrow, Chief Officer, Just CU, England "Historically, we have always paid a min 2% dividend and used to be very proud of this. We were also worried that if we didn't pay it that members would leave and take their shares with them. However about 3 years ago, we changed this and since then have paid nil/low or capped dividend - we have seen virtually no detriment to the share balance". John Smith, Governance Officer, HEYCU, England "Are our members 'rate tarts'* and leave the credit union, if we pay insufficient dividend? In our experience here at HEY Credit Union, that doesn't appear to be the case at all. It would seem that very few of our members are saving with us because of the return, and more likely that other factors are the prime motivators, such as trust and safety (just want somewhere they trust to look after their money), ability to access funds without fuss, our customer care standards (they feel we look after them), habit, desire to support a local community enterprise, co-operative values, and perhaps lack of awareness of alternatives". Christine Moore, CEO, Manchester CU, England "No, I don’t think many of our members are ‘rate tarts’, in fact I think the contrary is true. Some people who joined specifically for the Gold Saver a few years ago did take their money out when it closed (less than half). A focus group of savers we spoke to in 2018 overwhelmingly agreed they were not interested in the rate but glad their money was being used for good and to help other people (very heart-warming to hear!)". Michael Byrne, CEO, Core Credit Union, Ireland Are our members 'rate tarts' and leave the credit union, if we pay insufficient dividend? The vast majority of members are not. Reality is most members have modest savings which wouldn’t attract much interest no matter where they are held. A small number (but do hold proportionally more of the savings) would be rate sensitive and will be looking for a return. I would estimate that less than 5%of savings would be at risk of moving for better rates. Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

Paul Jones and Nick Money update us on the wide list of projects, papers and conferences coming up in the next 12 months at the Swoboda Research Centre. Hear about: Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

This podcast captures the views of some financial services industry commentators on the merits and drawbacks of ESAS (Employee Salary Advance Schemes). Guests on this podcast are: How a Employee Salary Advance Scheme works: Specialist scheme operators, which are usually unregulated businesses, often provide the product as part of a 'wellbeing package' to help employees with financial management. Some offer employees an app based platform which sits between the employer’s payroll operations and the employee’s bank account. The employee can then a draw down usually up to half of their accrued or earned wages before their next pay day. The scheme operators usually charge the employee a fee for each drawdown. The employer will then pay the balance of the salary (i.e. net of the advanced payments and the fees for the service) on the next payday. Employees can make multiple drawdowns during each pay cycle and can repeat this again in subsequent periods. For many employees who do not have major debt problems, an ESAS (Employee Salary Advance Scheme) may be helpful where for a variety of reasons they need to quickly access some of their salary early. However, for employees with limited options, there are potential risks. Set out below are ways in which employers and scheme operators could mitigate some of these risks. The FSA says: The risks for employees and employers are: While the product has benefits, it is important that employees and employers are aware that there may be some risks in using these schemes. Lack of credit regulationTalking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

The past two years has been the ultimate stress test for the financial, operational, competitive, and cultural resiliency of credit unions. Leaders have greater depth of insight into the risks facing their credit union and can now better plan for and address those risks, allowing the organisation to focus primarily on longer-term opportunities. Some credit unions are only now emerging from the lockdown to seek new members in a tremendously competitive and digital world. The economic challenges of the past two years have amplified the essential role credit unions can play in the lives of their members and communities. This environment presents the opportunity for credit unions to re-think not only their operating norms but also how to position the organisation to make an even greater impact on employees, members, and communities. Listen to the views of: donorecu.iescottishcu.orgabcul.coopopen-money.co.ukSend your feedback to Chris Smith at smithowls@gmail.com Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

This summer saw the publication 'Gambling, Vulnerability and FCA Compliance' (How financial services firms can achieve the best outcomes for vulnerable customers who gamble), by Sharon Collard and Katie Cross at the Bristol University Personal Finance Research Centre. Credit unions are seeing increased levels of gambling activity on members accounts, especially since the pandemic. Many credit unions can conduct more forensic assessment of members accounts following the uptake in use of 'open banking'. This has contributed to a rising concern that gambling is causing harm to members and their families. Should the credit unions intervene, or should they mind their own business? Listen to the excellent points of view from industry leaders on this podcast. Sharon Collard states, at a conservative estimate, at least one in ten adults in Britain (and I guess similar numbers in Ireland too) experience harmful gambling, either because of their own gambling or someone else’s. Gambling-related vulnerability can present a unique set of challenges because of its complexity, the fact is that the member may not be fully in control of their decisions or actions, and the fact is that it may not always be clear what a credit union can do to ensure the fair treatment of customers in this situation. Do credit unions intervene, or not seems to be the conundrum? I think what we have heard, on this podcast, demonstrates that credit unions are well-placed to address the financial harms linked to gambling-related vulnerability. Some, credit unions are embarking on being quite interventionist and perhaps others less so. Perhaps credit unions can demonstrate their differences, from their competitors, by showing a more caring and concerned response to this growing problem in society. Or maybe our governments will curb the gambling companies and restrict the proliferation of their advertising; but I wouldn't bet on it. Listen to the contributors to this podcast: Gambling-vulnerability-FCA-compliance-report.pdf (bristol.ac.uk)http://www.bristol.ac.uk/media-library/sites/geography/pfrc/Gambling-vulnerability-FCA-compliance-report.pdf Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

The Save and Sound project is now looking further afield for more credit union memories. The project wants to make sure that the efforts of people who worked to set up and run credit unions in the early days of the movement are not forgotten. The history of British credit unions is a diverse and inspiring one and the project wants to hear from anyone who was involved with a credit union in whatever way. Anyone with any information about early credit unions is encouraged to get in touch. By collecting and sharing the unique personal memories of a diverse range of credit union pioneers, Save and Sound will help many more people learn about the history and heritage of British credit unions. Save and Sound was originally funded to collect 40 oral history interviews across the north of England, but now the project expands across Britain. The project has already recruited volunteers that have been trained as oral history interviewers or to assist in the development of a new website. For more information, please visit https://www.creditunionfoundation.org.uk/projects/save-and-sound or contact Abbie Shelton at abbie.shelton@creditunionfoundation.org.uk Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

The purpose of credit unions is obvious, isn’t it? Well, isn’t it? One of the perceptions about credit unions is that they ‘alleviate poverty’ and I guess many within the Irish & UK credit union movement will accept that perception. I suspect that banks are not perceived as alleviating poverty, by the general public or even bank workers. So, do credit unions alleviate poverty? I spoke to three well known experienced credit union people; Paul Jones, Eileen Halligan & Des Morrisey and put this question to them. I started with Dr Paul A. Jones, Director of Research at CFCFE, who is also Reader in the Social Economy at Liverpool John Moores University, where he heads up the Research Unit for Financial Inclusion. I then spoke with Eileen Halligan, CEO & Secretary at Central Liverpool Credit Union. A well established credit union with over 16,000 members with three branches. Finally, I got the views of Des Morrisey, the former, CEO of Tallaght Credit Union in Ireland. A 35 year old credit union with 17, 000 members, with over EU65m in assets. Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

This is podcast is where I look at another mobile 'app' being currently used by some credit unions. In this edition I talk with the enthusiastic Karen Bennett, CEO of the Merseyside based Enterprise Credit Union, about its fairly recent take up member mobile ‘app’ CUApps. Firstly, I spoke with the two young Scots tech entrepreneurs, Declan McGallagy and Jack Alison who founded CU Apps over eight years ago. They tell me how they specialise in premium mobile app and chatbot development, working closely with credit unions and their core banking providers to offer bespoke apps that help credit unions reduce costs and engage new and existing members through expert mobile and chat offerings. We cannot yet know whether people’s new digital communication patterns will continue once stay-at-home, distancing, and lockdown measures are lifted, and people are able to meet more easily, in person again. However, given the major impact the coronavirus pandemic has had on people’s increase in digital communication behaviours, clearly credit unions are increasingly considering how the pandemic is shaping their entire digital future. Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

I’ve decided to have a closer look at the world of credit union ‘apps’ or Fintech, as some call it. Many of you are aware that a tsunami of helpful apps has arrived at the door of credit unions in the last few years and in many cases transformed how members interact or communicate with their credit union. Some credit unions have willingly adopted the apps available, and some are still considering. Perhaps there is still a little suspicion of earlier tech failures in the Irish & British credit union movements over the years that holds some credit unions back? I don’t know….but I’ve put together a few stories of some of the ‘apps’ in use, and some in development. In this edition I will be talking to Matt Bland, CEO of the Manchester based Co-op Credit Union, about its first year of taking on the member ‘app’ NIVO. Launched in late 2018 as an early-stage spin-out from Barclays Bank, Nivo is already working with large banks, lending brokers, lenders, professional services companies and credit unions who use the platform to significantly improve member sign-ups and service efficiency. NHS Credit Union state that the NIVO app doubled their member ‘onboarding’ and enabled loan applications to soar to 87% of loans being processed within one day. An impressive list of users have taken up the app. Listen to the founder, and CEO of NIVO, Michael Common . Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

I've always been amazed at the passion and support for this unique form of credit union education that has seen over 4,500 credit union employees, volunteers, directors and supporters attending over the years. The EU version has been running several years, with events usually based in the UK. The US version, of the DE event, has been around for almost 40 years. The main purpose of the DE programmes is to "..... is to help established and emerging leaders within the credit union movement understand and leverage credit unions’ unique business model to serve members and communities in new and better ways". Listen to Lois Kitsch, the former National Programme Director for the National Credit Union Foundation (USA) responsible for the Development Education Programme, explain the impact of this type of immersive education. Listen to Marlene Shiels, CEO Capital Credit Union (Scotland), explain the power of the events so far and the successes with many individuals. Andy Davey, Operations Manager, Co-op Credit Union(UK), describes his DE journey, as a graduate, with both the EU and USA DE programmes. For information about the EU DE events contact Carole Philbin: Carol.Phibin@partnerscreditunion.co.uk and for the USA events contact Maggie Wolff, Development Education Manager mwolff@ncuf.coop Website: The Development Education (DE) Program (ncuf.coop) Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

This is an interviewed with Sir Douglas Flint who is chair of Standard Life Aberdeen, IP Group, the Corporate board of Cancer Research UK and is a trustee of the Royal Marsden Cancer Charity. He was previously Group Chairman of HSBC Holdings and he has held other roles, notably as a non-executive director of BP. Clearly, Sir Douglas has many years of experience of board rooms of successful businesses and his Chairmanship of the Just Finance Foundation has placed him in close proximity to credit unions. So, along with his insights into successful board rooms, I was firstly interested in asking him about his Chairmanship of the Just Finance Foundation. Then I asked him what changes would you make to boardrooms to make them more effective? "Boards need to spend more time on what’s important rather that what’s urgent". He added, There are 5 key questions that we need to think about: https://www.justfinancefoundation.org.uk/ The Just Finance Foundation runs a project called LifeSavers. This is an innovative, values-based financial education programme for primary schools, teaching children how to manage money wisely. Offering a whole school approach, LifeSavers provides: credit unionsTalking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

Booking is now open for our first CFCFE conference of the year, on Monday 29th March. Towards New Business Models: great speakers and plenty of group discussion, looking at the 2021 and future external operating context, the importance of building a business model on a clear and agreed purpose, and credit union leader experience of making mergers work. Join other credit union leaders, directors, suppliers, regulators and policymakers for stimulating ideas and to share your own views, with plenty of opportunities for interaction. Book your place here! https://cfcfe.eu/wp-content/uploads/2020/11/202011_CFCFE22_Social_Impact_Realising_Potential.pdf What is the issue? 2020 saw a significant acceleration of the digitalisation of our societies and economies. Post-vaccines, most agree there will not be a great reversion to a 2019 way of life. Alongside impacts of the pandemic, the evolution of fintech and big data technology, such as open banking, will facilitate further significant change in the financial services industry, with uncertain consequence for consumer behaviour. For UK credit unions, the next 24 months may offer legislative change and widened scope for trading. Credit union leaders, both executives and directors, need to consider whether their business model is right for this environment. Some credit unions have seen merger as a strategic response to strengthen their organisations, but this is not an easy process to get right. This conference will consider the external operating context, the importance of building a business model on a clear and agreed purpose, and explore credit union leader experience of making mergers work. How will the online conference work? The conference will be presented on Zoom. We are working to deliver an enjoyable and interactive online experience of the conference. Details of how you can ask questions, join in discussion etc. will be sent to attendees nearer the time. Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

Early last year I interviewed Matt Bland, of the Manchester based Co-op Credit Union, as he began his debut year in charge (2020). This is interview asks Matt how was his first year? After making the interesting swop from being a policy and regulation specialist, at the trade body ABCUL back in 2020, Matt embarked on turning the sleeping giant of the Co-op Credit Union (CCU) into a more nimble and ambitious outfit. Matt was selected for the job from an impressive batch of applicants but no matter how much the CCU directors tested his ability at the interviews, no one could plan for the test of the pandemic! Matt gives a fascinating insight into being a CEO, for the first time, and how to cope with a pandemic. The Co-op Credit Union (co-operativecreditunion.coop) https://cfcfe.eu/ Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

An interview with Robert Kelly CEO at ABCUL (Assoc. of British Credit Unions Ltd). I was really interested in the news that ABCUL are to launch a Strategic Merger Taskforce. Robert Kelly, CEO at ABCUL, once again appears to tackle subjects that appear sometimes to be difficult to deal with but nevertheless are really of the moment. Credit Union mergers, or transfer of engagements, in the past have typically been a way of saving a struggling credit union from failure, by being absorbed into a healthier partner. However, could two, or more, credit unions join; and become strategically stronger by merging from a position of strength of their combined healthy businesses? This new task force should have its work cut out in helping understand what role mergers in boosting the sustainability drive for credit unions. A great deal has been said in recent times about the need for collaboration between credit unions and I know there are collaboration projects out there that are doing well, but I wonder if there is a co-operative way forward, it could be a jointly owned ‘CUSO’s (credit union service organisations) or in some cases a strategic merger? It has to be said that sometimes, following mergers of any business, scale economies lead to tough outcomes for some stakeholders and I hope the boards of our credit unions are ready for that? Here's some of the questions I put to Robert: Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

Over the last few years, the importance of flexible, efficient and modern technology has risen up the agenda for many credit unions. 2020 has made this even more pronounced, as the ability of organisation to serve members effectively while staff are remote from members (and each other) has been given a severe test. Sometimes credit unions come to the conclusion that their strategy cannot be delivered with the constraints of their current core processing and accounting system. But replacing this component of the business is daunting and can be compared to major surgery – expensive, painful and risky. Yet still critical to survival – so what to do? In this podcast you hear from two credit unions specialists that know this well trodden IT road and their insight and advice is both timely and straight forward. Ralph Swoboda & Todd Proulx. Ralph Swoboda, the Chair of CFCFE, is also the Managing Director of CUFA Ltd., the Dublin based provider of financial analytics software to credit unions and other mutual financial firms. An attorney by training, he has forty-five years of experience in the USA and international credit union sector, having served as President/CEO of Credit Union National Association (the primary U.S. credit union trade body), as Chairman of the Management Committee of the Association of British Credit Unions, Ltd. (ABCUL), and later as head of International Operations for CUNA Mutual Group. After leaving CUNA Mutual in 2005, Ralph co-founded CUFA Ltd. and has provided consulting and executive-level project management services to credit unions and credit union organisations internationally. Ralph has also served as a director of credit union and co-operative organisations, including CARE USA, US Central Credit Union, and the Filene Research Institute (of which he was one of the founders). Contact Ralph: ralphswoboda@cfcfe.eu Todd Proulx, a consultant with vast experience of core system replacement projects, has written a paper for CFCFE on how to approach this vital issue. In ‘When it Hurts More to Stay Than to Leave: Time for a New Core System?‘, Todd offers wise advice on what might drive a credit union to switch providers, how to conduct a robust procurement process and some of the key functionality that a solution needs to be able to support. Todd concludes with the reminder that “a core system should never dictate or limit credit union business strategy.” Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

What a year for this agenda. First came shock; and then came shows of support. But they’re only worth a penny if we do not move to meaningful action and concrete change. Change you can see. Change you can measure. And change that makes a material difference to people’s lives. To achieve that, we can’t just speak about one aspect of diversity and inclusion without also understanding the importance of all others, and how they intersect to make up someone’s experiences. But following the killing of George Floyd, much of the push for action in recent months has quite rightly been focused on addressing systematic racial and ethnic inequality. For me, this is first and foremost a moral question. Not just as a human being, but also as a producer of podcasts for credit unions. I have always believed that credit unions are superb institutions in helping people get in and on in life. But still too many people, because of their gender, race, ethnicity, sexual orientation, disability, background, or circumstance, find themselves unfairly held back. Their route barred, and talents ignored. I believe that no-one should have to experience that. And I believe that credit unions – among many institutions in society – should be best placed to help solve this problem. We are fast, we work in teams, we help people fulfil their potential. I’ve got an excellent line up of expert speakers to inform and inspire you on this podcast. And let’s be honest, it’s their voices, stories, and insights that you’re tuning in to hear. Not mine. Listen to: Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

CFCFE have released a report from Dr Olive McCarthy of the Centre for Co-operative Studies at Cork University Business School (and CFCFE’s Advisory Board) on credit union perceptions of the opportunities and challenges for measuring and reporting on social impact – what CFCFE calls ‘the credit union difference’. Olive spoke to staff from 23 credit unions and 11 stakeholder to gather insights into what organisations see as the opportunities and barriers in relation to evaluating systematically the contributions credit unions make to their members’ and communities’ wellbeing. Credit Unions and Social Impact Measurement and Reporting: Realising the Potential can be downloaded here. https://cfcfe.eu/wp-content/uploads/2020/11/202011_CFCFE22_Social_Impact_Realising_Potential.pdf This is a recording of the CFCFE online seminar that took place on Wednesday 25th November, where Olive summarised her work alongside Paul Jones and Nick Money, who will outline the methodology CFCFE is working on for credit unions. Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com

Olive McCarthy is an active member of St. Michael's Credit Union, Cork, Ireland. She receives research funding from a wide array of external sources, including government bodies, NGOs and sectoral organisations. She is a member of the Credit Union Advisory Committee, appointed by the Irish Minister for Finance. The cost of accessing small personal loans can be eye-wateringly high for those who need it most. Take the UK, where a £200 loan from Provident Personal Credit over 13 weeks costs £86 in interest. That’s an equivalent APR of a whopping 1,557.7%. These offers are available even after the caps on payday loans that the UK introduced five years ago. In the months after the reforms, the Financial Conduct Authority (FCA) reported that the number of loans and the overall amount borrowed was down 35%. From there, the decrease continued: there were 5.4 million high-cost loans totalling £1.3 billion in 2018 with the total amount repayable at £2.1 billion; five years earlier, there had been 10.3 million loans worth £2.5 billion. Yet clearly, high-cost credit has not gone away entirely, and it looks set to get bigger again. Provident, the UK and Ireland’s largest high-cost doorstep credit provider, is anticipating increased demand when unemployment rises as the UK furlough scheme winds down. The lender has reportedly put aside £240 million for a surge in defaults. So, what have we learned since the rules changed, and will those who need credit be able to access it in the wake of the pandemic? To cap or not to cap? High interest rates are usually justified by the argument that the borrowers are more likely to default, often having been turned down elsewhere. Higher rates compensate the lender for higher risk. People often borrow on the basis of convenience and whether they can afford the repayments, rather than the cost of the loan. This can lead to financial strain, repeat borrowing and defaults. After all, credit is debt. Nonetheless, the debate continues among policy experts worldwide about whether caps are the best response. Supporters point out that restrictions have reduced the cost of credit for low-income borrowers, tackled over-indebtedness and helped to prevent people from being exploited. Some consumers may no longer have access to credit because of providers changing their business models or exiting the market, but many of these people would probably not pass a rigorous affordability check and may be over-indebted already. Opponents highlight the possible unintended consequences. As well as less access to credit, they worry about the potential for more illegal moneylenders, and loans companies introducing charges that circumvent the restrictions. Swayed by these arguments, Ireland is among a minority of European countries to favour increasing regulation and supervision over caps. For example, high-cost warnings in loans advertising became a requirement from September 1. Although the government Talking Credit Unions with Chris Smith is a regular podcast dedicated to informing credit union practitioners, leaders and opinion formers on variety of industry topics. To contact Chris Smith, smithowls@gmail.com