It is not business as usual for Barbados’ credit union movement. Like their colleagues in the insurance sector, local cooperatives will now have to conform to a new series of guidelines issued by the Financial Services Commission.
The FSC, in a post consultation paper, said as the regulator of non-banking financial services in Barbados its guileless would apply to entities licensed and/or registered pursuant to the Financial Services Commission Act and the Cooperative Societies Act.
It has finalised the 15 new rules following recent consultations with local credit union officials and they cover a range of issues including safety and soundness, complaints, credit risk management, valuation of real property, and directors remuneration.
In terms of the guideline related to safety and soundness including directors, small credit unions and management, the cooperative sector had raised concern that the proposed guideline, which “seeks to make a distinction between the requirements for credit unions with assets in excess of $10 million as against those with assets of less than $10 million” should be “reviewed to take into account the realities of the existing credit union landscape”.
“The commission is mindful of credit unions which are fully volunteer-based and those which employ resources. The category of credit unions with assets less than $10 million was created in recognition of this fact,” the FSC said.
“There are only three credit unions that fall into a $5 million to $10 million category and some of these credit unions have less sophisticated operations than smaller credit unions and therefore can be treated similarly to credit unions with assets less than $5 million.
“The commission also expects that the requisite policies and systems will be relevant to the size and complexity of the individual credit union as even among the larger credit unions there is a wide disparity in the scope of their operations,” it added.
The commission, saying it recognised that all regulatory change has an impact on the decision making and the internal procedures of those entities affected by it, it was “therefore seeking to create an environment in which business decisions can be made in an orderly manner and in a way which avoids causing unnecessary disturbance to credit union operations and to the interests of members and other stakeholders, while also enhancing transparency in the process”. (SC)