CREDIT UNIONS are looking to be their “brother’s keeper” and share the cost of services as they seek to comply with new Financial Services Commission’s (FSC) regulations.
And at least two credit unions have joined forces in a move that has been given the green light by the umbrella body of the movement.
President of the Barbados Co-operative And Credit Union League Limited (BCCUL), Barry Hunte, who was responding to questions as the league hosted its annual general meeting at the Lloyd Erskine Sandiford Centre recently, said the league was encouraging the shared services’ approach.
Hunte said the board of the league had analysed the new environment in which its members were now operating and, in keeping with the new FSC regulations, it had “come to the realisation that we must be compliant”.
He acknowledged that the smaller credit unions might, however, face challenges in employing full-time compliance officers or auditors.
“We found in our review of the movement that there were some stress factors impacting our smaller credit unions,” Hunte explained.
“Historically, we worked on a voluntary basis and therefore the structures you would see, for example, in the larger credit unions, you will not necessarily see obtaining in the smaller credit union.
“But the regulations or the legislation still require compliance, still require that you audit your books irrespective of size and, therefore, we are suggesting that because of the associated economic costs to have these services that we should share – be our brother’s keeper,” he explained.
“[So] we have determined the best approach will be to share the services or the cost of those services among the movement or among those affiliates who can ill afford on their own to pay for these services which are critical going forward.”
Hunte added that the board of the BCCUL was discussing the issue with its members with the intention of coming up with the best solution so “no affiliate is left out of benefiting from satisfying the regulatory framework”.
He went on to say that there has also been at least one merger between a smaller and larger credit union to the benefit of both unions’ members.
That merger, he explained, was initiated by the smaller credit union and such moves are encouraged by the board.
“Once the best practices are reflected in such mergers, rest assured the league, while standing at arm’s length because this is the remit of the respective boards of the credit unions, but we will no doubt, if consulted or determine that this is the best approach, as the umbrella body, would want to encourage without seeking to influence the relevant credit unions to engage in such best practices,” he said. (HLE)
