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COB wants even playing field


Finance Minister, Chris Sinckler (third left), about to cut the ribbon opening the COB Blackrock branch. From left are CEO, Steve Belle; COB’s longest member, Kelvin Nowell; Treasurer, Herma Griffith-Ifill; and Rev’d Canon, George Harewood.

The City of Bridgetown Credit Union (COB) is unhappy with some financial regulations which it says restricts it from certain businesses, including trading in savings bonds.

COB’s Chief Executive Officer, Steve Belle made this disclosure yesterday, while speaking during the opening of their new branch at Carlton Plaza, Black Rock, St Michael.

Addressing those attending the opening ceremony, including Minister of Finance, Chris Sinckler, Belle told the Minister the credit union was seeking his intervention on several matters which had been engaging the attention of COB.


CEO of COB, Steve Belle speaking during yesterday’s opening ceremony.

He said, “The recent decision by the Central Bank of Barbados to deregulate the [percentage] set on interests rates of savings accounts and the intervention of that institution in the market by issuing of savings bonds places COB at a disadvantage to the commercial banks”.


“While we at COB have to compete with banks for savings and loans business, the opportunity to generate fees as well as improve the value proposition of our service offerings to our over 55,000 members through the sale and retention of savings bonds is not allowed, as under existing laws the redemption of savings bonds are restricted to commercial banks.

“We therefore request that the appropriate authorities address this issue so that we can more effectively cater to our membership,” Belle insisted.

In subsequent remarks at the function, Sinckler expressed understanding of the credit union’s request and urged these savings cooperatives to continue to put their case to the Ministry of Finance and the Central Bank, but warned , “be careful what you wish for”.


Minister of Finance Chris Sinckler

He advised that in their desire to be granted financial trading privileges similar to commercial banks, credit unions must expect to be subjected to the same rigid conditions to which the for-profit companies are subjected.

“With greater freedom comes greater responsibility, and when you portend to adopt a different stance on quality with commercial banks … you too will have to live with the standards of commercial bank,” Sinckler said.

It is COB’s fourth branch, adding to the existing ones located at the Manor Lodge Complex, Green Hill outlet, and the Broad Street, Bridgetown headquarters of the 33-year-old savings and loans institution.

7 Responses to COB wants even playing field

  1. Patrick Blackman June 7, 2015 at 12:03 pm

    I think the COB is quite confused on what it wants to be. If you want to effectively compete with a commercial bank then you need to be a commercial bank. Complaining about equality is just plain stupid. if your strategic plan is based on generating fees, then I think you have to return to the drawing board.

    You have a great opportunity to embrace developmental banking services which allows you to work at a very close level with the “man in the street” avoiding all the cost structures of a commercial bank and strengthening your community base relationships with your members.

    You are not a commercial bank, stop trying to compete in that space and focus on your core principles.

  2. Caswell Franklyn June 7, 2015 at 6:56 pm

    Thank you Patrick Blackman! You are absolutely correct. Credit unions in Barbados seem not to understand what they are supposed to be, and as a result, they are mistakenly trying to compete with banks. One day they are not-for-profit financial co-operatives as they ought to be and then on the other hand they are imitating banks and killing their members with fees.

    The major problem though is that the regulator, the Financial Services Commission (FSC) appears not to have a clue about their role and allows credit unions to break the rules with impunity. It ought to be a major scandal where credit unions take members to court to recover bad debt, which forces members to pay legal fees that are at least 15% of the outstanding balance. Instead, they could achieve the same result if they take members before the FSC and all it would cost the delinquent member is $25. The only body that benefits in this scenario is the lawyer. As I understand it, some lawyers are kicking back to credit union executive officers.

    • Andrew The Voice June 8, 2015 at 9:49 am

      This is very interesting, I have to contact a friend who was recently, royally screwed by the credit union. This same credit union.

  3. Patrick Blackman June 7, 2015 at 7:28 pm

    @caswell Franklyn: I am not very up to date with the banking laws in effective now and the FTC as I have been outside for a few decades but it is important to send a clear message about delinquencies , I personally prefer a negotiated settlement in such cases, however things like this are avoided by strict due diligence policies. I think the credit unions ( as shareholders) should form a bank as a separate and independent entity to compete with the other commercial banks.

    They should realize by now that the foreign banks are significantly scaling back in the region and the only other real player is Republic, now may be a good time to acquire a portion of their operations.

    Cannot comment on the lawyer stuff but having an in-house lawyer should resolve that issue. Why not just offer a scholarship to some student to persue law and build up your own resource base for the industry, but again most management don’t see things from this perspective.

  4. Margaret Lorde
    Margaret Lorde June 8, 2015 at 9:34 am

    Chris doesn’t look well in this pic.

  5. Carl Harper June 8, 2015 at 3:16 pm

    Credit unions need to be cautious about seeking equality with commercial banks. Not that this would have prevented the Minister of Finance imposing a tax on the assets of credit unions in a similar manner as commercial banks, which has no doubt forced the former to rethink their operations going forward.

    The credit union movement started as the “small man’s bank,” providing less expensive ways for depositors to escape the ever increasing fees, high-interest loan rates and government taxes on savings at commercial banks. Credit unions allowed wider categories of loans for members that were seen as a nuisance by commercial banks. Those loans were usually “ratioed” to the deposits and shares of the borrower.

    Credit unions assets have grown tremendously over the years and their functions, products and services now closely resemble those of commercial banks. It’s the phenomenal growth of credit unions that attracted the attention of the Central Bank and Financial Services Commission.

    Now credit unions have several branches, massive membership to leverage group medical insurance, are disbursing mortgages, and diversifying into various investment portfolios. Perhaps, the shift in the demand and supply of money–savings, loans etc–from banks to credit unions, and the resulting reduction in profits have taken its toll on the banking sector.

    It is no surprise that the commercial banks that hold $200 million in credit union deposits have continuously lobbied government to enact legislation to bring credit unions more in line with banks.

    This is a mistake by the CEO of COB Credit Union to move credit unionism further away from its traditional and philosophical moorings to mirror the banking sector. In other words, credit unions cannot be banks operating under the Cooperatives Act.

    There was some talk by the Credit Union League to establish a commercial bank, given the huge cash already tied-up in the banks. Those foreign-owned commercial banks will be the biggest losers if the credit unions withdraw their money and provide even stiffer competition in the banking sector.

    If people have been calling for a locally-owned bank following their sentimental attachment to the loss of BNB, this can only augur better for the consumer of banking services.

  6. Patrick Blackman June 8, 2015 at 6:08 pm

    @Carl Harper: Very well presented, in agreement with your view. My only concern is that the credit unions cannot just sit on that hoard of cash for ever, it has to be translated into viable earning potential for the credit union movement. How they will do that remains to be seen, but surely it would require some serious creativing thinking. I suggested developmental projects as a viable option, fostering a closer working relationship catering to “the man in the street”. May be low income housing (multi-housing units) to help reduce the cost home ownership for its members.


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