Tartan Credit Union, one of the few remaining mutuals with a bond to industry, has proposed a merger with Select Credit Union in Sydney.Formerly the 3M Employees Credit Union, Tartan is being squeezed on two fronts.One is cost cutting by 3M (a US-based maker of diverse industrial products), which has sapped confidence and demand for loans from its target market.The second is the industry wide burden of the rising cost of compliance.Trevor Poole, chief executive of Tartan, said: "We are answerable to so many bodies now, of which APRA is the main one."We are probably one of the smallest financial institutions in Australia, with 1200 members."The compliance and the regulations have become unbearable for an institution our size. We really need a compliance officer [which] we can't afford."Tartan had loans of A$17 million and assets of $24 million at June 2012, with a capital ratio of 65 per cent.Poole said 3M had "put pressure on subsidiaries, so squeezing spending and salaries. So, members are not borrowing to buy a house."We are stagnating at the moment," he said.Select Credit Union's chief executive, Mark Worthington, said staff at 3M's head office would be served by Select's branch in Ryde. The branch was once operated by the CSR-Rinker Employees Credit Union, another mutual whose industry bonds were insufficient to maintain it as an independent entity.