Press Releases

President's Address - 2023 Annual General Meeting

 

Just as the Barbados economy has faced some setbacks but is making important strides following the pandemic period, the Credit Union movement has mirrored this trajectory somewhat. In spite of the challenges, it has been a reasonably good year for the movement and for the League.

There are some key performance indicators on which we rely as the basis for this statement. We are pleased to report that there has been growth in membership, in savings by our members, in assets and loan book.

PROGRESS
Among our affiliate societies, almost 7,000 new members joined the movement, taking the total membership from 231, 046 to 238, 042. This is satisfactory growth given the already extensive membership base that exists among the Barbados population.

This rise in membership occurred even as the number of credit unions was reduced by one on account of consolidation. The Courtesy Credit Union merged its assets with United Enterprise.

These instances of consolidation are expected to continue, and the League supports this course of action as the merging of smaller affiliates will likely create larger and stronger units that benefit the membership.

On the matter of assets, there was also a satisfactory increase in that area with asset growth up by 3.42 percent, moving from $3.03 billion to $3.14 billion over the last financial year.

For the first time, last year the sector’s loan book crossed the $2 billion threshold, while total savings of our affiliates saw year on year growth of 3.33 percent, moving to $2.75 billion.

DEPOSIT INSURANCE
This is an important segue into discussion on the matter of Deposit Insurance (DI). As you are well aware, this has been a critical and longstanding goal of the movement. Having built on the foundation established by previous Boards of the League, this year significant progress has been achieved, though there are still some hurdles to be crossed before we reach the finish line.

We welcomed the filling of the critical vacancy of Chief Executive Officer at the Barbados Deposit Insurance Corporation (BDIC) in the person of Carole Eleuthere-Jean Marie.

Another key development in the process towards reaching the DI goal was the establishment of the Cross Regulatory Working Group, which has already begun its work and held the first meeting in August.

Who are the members of this Cross Regulatory Working Group? It includes representatives from the League, the Central Bank of Barbados, the Financial Services Commission (FSC), the BDIC, and from the Office of the Chief Parliamentary Counsel.

The presence of a representative from the Office of the Chief Parliamentary Counsel is essential to advance the pace at which the draft legislation can be undertaken. Being in the room for the discussions allows the drafters to have full understanding of the context of the requirements and any nuances of the sector.

August was an active month for the League. Due to the significant progress being made on DI, we brought back our principal consultant Dave Grace of Dave Grace & Associates for our comprehensive engagement with the key stakeholders including the Ministry of Finance & Economic Affairs, our main regulators – the FSC and the Central Bank, as well as BDIC.

Of course, we also facilitated a very important session with the management and directors of credit unions across the island. That process allowed us to understand the current views directly from officers and yielded critical information on how the process is likely to unfold.

With regard to the next steps:
1. The target date for preparation of draft legislation has been given as December 31.
2. The establishment of Minimum Standards for entry to the DI programme is also coming.

Importantly, the League will be very involved in that process, but all the requirements and standards will be agreed to within the context of the Working Group. The League will have a say but ultimately, the BDIC and the regulators will play a critical role in determining those minimum standards.

NATIONAL PAYMENTS SYSTEM ACT
On April 15, 2022, the National Payments System Act was proclaimed. This was an important development in the local financial landscape because it provides the legal framework for all players in the financial services industry to be treated equally as bona fide participants in the national payments system.

In this connection, we eagerly look forward to the establishment of a 10-person National Payments System Advisory Council and being given parity in terms of representation on the Council.

By way of explanation, prior to the Act, there was no real comprehensive legal framework, as City of Bridgetown Credit Union and Barbados Public Workers’ Cooperative Credit Union had access to the CARIFS network, but it was, for all intents and purposes, they had no bona fide status in their own right in this arrangement. The Act now effectively levels the playing field and creates a framework for the operation of the national payments system.

The establishment of the 10-person National Advisory Payment System Council will have one representative of The Barbados Bankers’ Association and the Credit Union movement will also have one person on the council, thus allowing us to play our role and ensure that the interests of the Credit Union sector are adequately represented in that context.

INITIATIVES
Brothers and sisters, your League has been proactive on another critical matter, and that is the issue of cyber security.

We are aware that cyber-attacks have mushroomed since the COVID-19 pandemic. This has been a world-wide development, and Barbados has not been spared.

As such, the board of the League has approved a Cyber Security Risk Mitigation Initiative (CSRMI) and we have engaged consultants from PRISM to work with us on the matter. PRISM is a highly respected Barbados-based regional technology group that specialises in various services across the financial sector. Currently, they administer the ACH network, and they were the entity behind the operation of the CARIFS card network.

Offering some background to the Cyber Security Risk Mitigation Initiative, the Board saw the need to increase awareness of the requirement for a more robust cyber security posture in the credit union movement, as important players in the island’s financial system.

It is our aim to bring all credit unions up to a basic level and we are also aware that this is an area on the radar of our regulators. In the banking sector, the Central Bank has already introduced comprehensive Technology and Cyber Risk Management Guidelines which aim to hold commercial banks to a framework of robust and resilient protection of customer data from intrusion, unlawful exploitation and theft.

Given the increasing role of our Credit Unions in the financial architecture, we fully expect that provisions on matters such as reporting of cyber incidents and compliance with the Data Protection Act, along with other provisions will be coming down the pike for Credit Unions.

THE FSC administered a Cyber Security Surveillance instrument for those affiliates with $40 million or more in assets. Our expectation is for a less complex surveillance instrument to be implemented for smaller institutions. We want all our affiliates to be ready for this expected development.

COOP ENERGY/BAMC
The Co-op Energy/BAMC proposal has been another key development in the sector. As a general observation, we wish to state our support for Coop Energy. We have established a working relationship with its board of directors and have agreed to work together and to do what we can to make Coop Energy a success.

 

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Barbados Co-operative & Credit Union League Ltd.
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