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Thursday, July 24, 2025

Threat to credit unions

by

20140615

Of­fi­cials of ma­jor cred­it union groups are seek­ing ur­gent talks with Prime Min­is­ter Kam­la Per­sad-Bisses­sar on Gov­ern­ment's pro­pos­als for con­trol of the move­ment.In a let­ter to the prime min­is­ter, they warned of the dis­as­trous and de­struc­tive im­pact of pro­pos­als in the draft Cred­it Union Bill, the Cen­tral Bank's Draft Pol­i­cy Pro­pos­al and the Con­sul­ta­tion Pa­per on the Pro­tec­tion Fund for De­posits and Shares Held in Cred­it Union.

The let­ter was signed by Jac­in­to Mar­tinez, Joseph Re­my, Rawle Richard­son and Esme Raphael and is coped to Fi­nance Min­is­ter Lar­ry Howai, Labour Min­is­ter Er­rol McLeod, Cen­tral Bank Gov­er­nor Jwala Ram­bar­ran and Karul Adams, Com­mis­sion­er for Co-op­er­a­tive De­vel­op­ment.The of­fi­cials said Gov­ern­ment's in­sis­tence on putting the cred­it union move­ment un­der the aegis of the Cen­tral Bank "will sub­vert and de­stroy the unique iden­ti­ty and pur­pose of our cred­it unions".

"Re­peat­ed­ly, at our con­sul­ta­tions with the Cen­tral Bank and the Min­istry of Fi­nance on the pol­i­cy pro­pos­al and the Draft Cred­it Union Bill, and with the Com­mis­sion­er of Co-op­er­a­tive De­vel­op­ment on the amend­ments to the Co-op­er­a­tive So­ci­eties Act, we have made the point that cred­it unions are not com­mer­cial banks."They con­sti­tute an in­dige­nous fi­nan­cial in­stru­ment of the peo­ple's sec­tor and are a crit­i­cal part of the share­hold­ing democ­ra­cy to which we all as­pire," they said.

The cred­it union rep­re­sen­ta­tives said they sup­port­ed Gov­ern­ment on the is­sue of a stronger, more rig­or­ous and ac­count­able fi­nan­cial land­scape and "main­tain­ing the high­est stan­dards of pru­den­tial reg­u­la­tion and su­per­vi­sion" for the sec­tor.

How­ev­er, they added: "To date, noth­ing that has come from the Gov­ern­ment has suc­ceed­ed in as­suag­ing our mem­bers' con­cerns. We are of the firm view that the Gov­ern­ment's take-over of the Co-op­er­a­tive Cred­it Union Move­ment through Cen­tral Bank reg­u­la­tion would be the death knell for the move­ment whose growth and ex­tra­or­di­nary suc­cess has been the re­sult of the dis­tinc­tive, peo­ple-ori­ent­ed char­ac­ter and unique val­ues based busi­ness mod­el, with built-in safe­guards that set it apart from the com­mer­cial bank­ing sec­tor."

They said the Cen­tral Bank, as a ma­jor ad­vo­cate of the com­mer­cial bank­ing sec­tor, has a con­flict of in­ter­est in the mat­ter and is un­suit­ed to the role as­cribed to it un­der the pro­pos­als for reg­u­la­tion.The groups have asked the prime min­is­ter for an ur­gent meet­ing at the ear­li­est pos­si­ble date to dis­cuss rec­om­men­da­tions for ac­count­abil­i­ty, reg­u­la­tion and su­per­vi­sion of cred­it unions in a way that will pro­tect the "peo­ple based and peo­ple cen­tred" sec­tor.


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