Credit unions decry pending new regulations

Basseterre, St. Kitts (August 26, 2013) — President of the St. Kitts and Nevis National Cooperative League Mr Andy Liburd is warning that credit unions in the Federation could be put out of business if suggested new regulations are enacted.

“We are now faced with new regulations, new Act, new laws, (and) new standards,” warned Mr Liburd. “They are all coming down on us and all at the same time as if we were never regulated.”

Mr Liburd made the remarks on Thursday August 22, at the opening ceremony of the 11th Annual OECS Credit Union Summit held at the St. Kitts Marriott Resort. The summit, which was hosted by the St. Kitts and Nevis National Cooperative League, was also attended by credit unions from other six OECS countries.

A cross sections of delegates at the 11th Annual OECS Credit Union Summit.
A cross sections of delegates at the 11th Annual OECS Credit Union Summit.

“The Credit Unions have always been regulated; we are not afraid of regulations,” pointed out Mr Liburd. “In fact it is our very by-laws and our motto ‘People Helping People’, the very principles on which we were founded, why we are still standing strong today.”

He said that the proposed new regulations are coming at a time when credit unions in the region are facing challenges resulting from the world economic fallout that is staring them in the eye, threatening their survival, and warned that they could face extinction.

“Coupled with the regulations, acts, laws and standards, they are all coming to us at the same time and if enacted in their second form will surely wipe us out from the world of business,” lamented Mr Liburd. “As you can see there is a rush to get us there, but no plan to take us there. This is a dangerous crossroad, we must stand guard; we must stand together and represent our existence.”

He challenged local credit unions to be innovative, by finding new ideas in order to maintain their position in their respective societies, and at the same time advising them that they must also cooperate among themselves for their survival and existence.

“For the first time, the St. Kitts and Nevis National Cooperative League has invited members from all the cooperatives in the Federation of St. Kitts and Nevis to be part of this summit so they can get an insight on the challenges facing their businesses,” stated Mr Liburd.

Other countries represented at the summit were Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St. Lucia, and St. Vincent and the Grenadines.

Prime Minister and Minister of Finance, the Right Hon Dr Denzil Douglas who delivered the feature address at the opening ceremony reminded credit unions that they have invested in the twin pillars of institutional safety and soundness, and commended them as safety and soundness within the credit unions sector had direct implication for the safety and soundness of the region as a whole.

He said he was aware of the emphasis credit unions have been placing on regulatory awareness and regulatory compliance and for that he commended them, adding that he had seen how the region’s credit unions had observed what has been going on in the rest of the world and how they learnt from the sometimes harsh and bitter experiences of others.

“We in the Eastern Caribbean have taken notes and our governments, the Eastern Caribbean Central Bank, and financial institutions like yours have as a result developed an even keener appreciation of the importance of functioning within insightfully developed practical and effective regulatory frameworks,” pointed out Dr Douglas.

“It is a credit to you, I emphasise, as the region’s credit unions that your heightened appreciation of the importance of strengthening credit unions regulation and supervision has led you over the years to seek and secure technical assistance to facilitate your sector’s self regulatory practices. And this is important because of the very large amount of a region’s assets that you are managing.”

In his closing remarks, Prime Minister Douglas emphasised that the region needs a credit unions sector that is strong and safe saying that they make important contributions to the financial health of the economies in the region and the options available to the people.

Premier of Nevis, the Hon Vance Amory who gave brief remarks reminded credit unions that they needed to adjust and respond to the needs of their members, adding that they could not continue with the present regulatory environment where regulators lack the training and capability to undertake effective oversight of the institutions.

Saying that his Nevis Island Administration worked well with the Nevis Cooperative Credit Union, Premier Amory at the same time warned against the imposition of draconian regulatory systems that could hamper growth of the credit unions.

You might also like