comply with statutory financial reporting regulations.

The Credit Union has been having problems meeting restrictions imposed on it about two years ago by the Bermuda Monetary Authority (BMA).

Both Government and the Credit Union said yesterday the reporting problems were due to administrative difficulties and nothing else.

Finance Minister the Hon. David Saul indicated that the BMA might introduce some changes to ensure future compliance with the law.

"They are not in compliance with legislation requiring them to get their up-to-date books to the BMA,'' said Dr. Saul.

"The BMA has discussed this with the Ministry of Finance and, as a result, they have gone in there.

"It is working with the Credit Union administration to see how soon we can get everything in compliance and get their computer and administration system sorted out so they can work to a schedule.'' There was no indication whatsoever of any impropriety of anyone's behalf, said Dr. Saul.

He added: "With a lot of patience and perseverance we can get this thing regularised.'' The Credit Union has a history of financial problems, but secretary/treasurer Mr. Calvin Smith said the organisation's dark days were over.

"We have made great strides over the last few years to improve the Credit Union's financial position,'' he said. "We haven't got any financial problems any more.

"What we have got is a problem complying with the very strict demands of the BMA.

"We have a staff of five people here and our administrative system was not geared up to complying with these regulations.

"Our system was set up to meet our needs to handle loans as efficiently and as quickly as possible.'' The regulations imposed by the BMA had increased the Credit Union's workload by as much as fourfold, said Mr. Smith.

One area, in particular, which was causing an administrative headache was the BMA's requirement to all the loans broken down and treated separately so their individual securities could be analysed.

Dr. Saul said one of the questions being addressed was whether the regulations affecting the Credit Union were "too much'' for the organisation.

Mr. Smith agreed that the a large part of the Credit Union's problems in the past had been in relation to bad loans, including some to Credit Union officers.

"Of course there have been loans to officers which have gone bad,'' he said.

"But there have been far more to non officers which have also gone bad.

Nobody got loans in preference over anyone else. Loans are made on people's credibility.'' Major problems with bad loans were a thing of the past, he said.

Now, members have to make deposits of between one-third and one-half of what they wanted to borrow before they could take out a loan.

To qualify for a loan, members must have been in the organisation for over six months and must have accounts that have been active over the most recent six months.

The Credit Union's most recent annual report, released in September, showed that it made a loss of $2,435 for fiscal 1991.

Accountancy firm Scott Hunter and Co. resigned as the organisation's auditor six weeks ago after nine years of doing its books.

The firm is bound by client confidentiality and has not given any reasons for its resignation.

Mr. Calvin Smith.