Loans granted by the Bermuda Industrial Union's Credit Union fell 40 percent and the organisation's surplus has fallen by more than $300,000.

According to the Credit Union's 2009 annual report, loans disbursed fell between 2006 and 2007.

The report, which includes audited financial statements for those two years and unaudited financial statements for 2008 and 2009, also appear to show that the Union's surplus has fallen from $363,000 to $43,000.

BIU's Credit Union has 5,000 members, and is designed to give as many people as possible access to financial services.

On a recent visit to the Island, Malcolm Edwards of the World Council of Credit Unions said the BIU's Credit Union was in need of modernisation, and that some unions in other countries have ATMs and online banking.

Since then Finance Minister Paula Cox has announced the Credit Union Act 1982 would be updated, with the proposal to transfer complete regulatory and supervisory responsibilities to the BMA. The legislation is expected to be tabled in the next session of the House of Assembly

The amendments will also raise the loan asset ratio from 60 to no more than 80 percent of assets. The report stated that in 2007 the Credit Union recorded loans at 90 percent of assets, adding: "The Credit Union therefore was in breach of the Act and out of line with standards in this regard.

"The ensuring years would see the Credit Union setting about to correct that. By curtailing lending the Credit Union has been gradually arresting the problem."

The Credit Union also warned members with delinquent loans it would use every means necessary, including the "long-arm of the law" to recoup the funds. In 2007 the delinquency rate fell from 20 percent of loans to ten percent.