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Eastern Credit Union looks to replicate La Joya model
Credit unions are not banks and so should have the freedom to get into services that banks may not offer, said Edwin Gooding, group chief executive officer, Eastern Credit Union. “What the Central Bank is doing is really bringing some kind of regulation to the credit union industry. Credit unions are still taking with the Central Bank until we get the right mix. The issue of regulation is not one that the movement is averse to. There are certain things because of our philosophy that the credit unions would want to see. The whole idea is providing services for its members which is beyond what the banks provide. We see ourselves as being different from them. The credit unions want people to recognise that there is a difference but, at the same time, conform to Central Bank regulations,” he told the Business Guardian.
In his feature address at the 42nd annual general meeting of Aero Services Credit Union at the end of March, Central Bank Governor Jwala Rambarran spoke about the latest development in the Draft Credit Union Bill and said “non-core activities” provide a supplementary source of earnings for credit unions and provide additional services to the credit union membership.
He added that these “non-core activities” represent a potential drain on the limited managerial capacity and expertise of many credit unions.
“As a consequence, the Credit Union Bill allows credit unions to provide these non-financial services once they represent no more than five per cent of total assets or ten per cent of revenues. These limits seek to ensure that financial intermediation remains the core business of credit unions and credit unions can minimise balance sheet risks arising from non-financial activities,” Rambarran said.
Rambarran also spoke about the importance of a Protection Fund.