Credit Union League president: Defend against unsupportive legislation

Brian Moore, president of the Co-operative Credit Union League of T&T is urging the credit union movement to defend against legislation which he says does not support the sector’s growth.

“We have to defend against the possibility of a legislative and regulatory framework that is not facilitative and supportive of credit union formation, expansion and growth as envisioned by International Labour Organisation (ILO) 93,” he said yesterday at the launch of the Co-operative Credit Union League of T&T’s Calendar of Events at the Capital Plaza Hotel, Port-of-Spain.

Moore’s comment followed an address by Minister in the Ministry of Finance Rudy Indarsingh who defended the proposed legislation, saying up to date laws are required because of T&T’s changing financial environment.

“The fear that the new legislation will bring about the demise of credit unions must be countered by the knowledge that the fast evolving financial environment requires credit unions to modernise their operations and be in a position to be more responsive to such changes,” the minister said.

“Effective financial regulation is an essential element for not only protecting your members funds but for the most part protecting the credit unions themselves from circumstances involving contagion risks, illiquidity and eventual insolvencies.”

Indarsingh said the Central Bank issued a draft credit union bill in November 2011 and in July 2012 issued draft regulations. He said the bank has since received feedback which is reflective of credit unions having the support of effective regulation.

The Central Bank Financial Stability Report for December, which was presented by the Central Bank Governor  Jwala Rambarran two weeks ago, stated: “Regarding credit unions, the Central Bank is considering comments received from the industry on the draft Credit Union Bill and is finalizing a response to the industry. This legislation is expected to be taken to Parliament by the middle of 2013.”

“While it recognised that the implementation of new legislation will be a challenge, it is recommended that the regulators adopt working  sessions with the sector to ensure that these new regulations are fully understood and can be effectively implemented under the banner of protecting the credit union and includes recognising and understanding the importance of prudential regulation to bring about sound credit unions in the future.”

Indarsingh also said corporate governance in credit unions is important. “The board is important in driving the vision of the credit union. The board also has a fiduciary duty to ensure that the credit unions develop and achieve its mandate  and potential,” he said.