Home' Trinidad and Tobago Guardian : September 14th 2014 Contents receive their money in the form of bonds.
In the same year, there was also the apparent collapse of
the Point Fortin's First National Credit Union, where neither
members nor creditors could access funds or monies owed to
In 2013, the credit union was evicted from its premises in
Techier Village and the Commissioner of Co-operatives launched
an investigation. On checking, the Sunday BG found that
credit union non-operational and the investigation still in
progress. Meanwhile, members are still unable to access their
Impasse: economics vs ideology
Clarifying his earlier statement in a subsequent interview
with the Sunday BG, Remy said there was a partly intentional,
partly unconscious effort to dismantle the credit union system.
He said both sets of thinking are evidenced in the proposed
Credit Union Bill.
"I think it is a combination of deliberate intent and mis-
understanding of what credit unions are. In some of our inter-
actions with the Central Bank, we have found they did not
have a clear understanding of what credit unions are. We
believe in the movement that credit unions, based on the fact
that they reach out to the soul of people by their community
linkages, are posing a threat to some of the major financial
institutions. The asset base is growing, the membership base,
the account base and we believe they may want to slow down
or stymie that growth."
The statistics show that, as a percentage of total financial
assets, credit unions assets, over the period 2008 to 2012,
averaged 3.5 per cent. In their best performing year for the
period, credit unions held $9.5 billion in assets. Over the same
period, their assets were on average 5.7 per of GDP.
Commercial banks, on the other hand, held on average 49
per cent of the country's total financial assets and, in their
best performing year, these were worth around $140 billion.
In 2012, commercial banks' held assets that were equivalent
to 80.7 per cent of T&T's GDP. (Source: Summary Economic
Bulletin March 2014)
Remy said the argument against the Credit Union Bill, as
it currently stands, goes beyond its financial, technical aspects,
many of which he said the movement agreed with.
Contrary to what the governor expressed, Remy said the
traditional financial sector still does not understand the foun-
dations of the credit union movement. He said the ideological
underpinnings of credit unions were to make funding more
accessible to those denied by banks and to do so in a manner
that drew on the collective and a common bond and not for
Remy said for the movement to come under the control
of the very banking system, it evolved separate and a part
from, was the destruction of what it meant to be a credit
But given that the protection of membership hangs in the
balance while the credit unions, the finance ministry and the
Central Bank battle it out, is this a reasonable position?
Consider the case of Ricky.
Ricky considers himself a business man. The owner of six
taxis, Ricky returned to T&T from Canada in the late 90s
with a small amount of savings. This was not enough to buy
his first taxi. The banks he approached turned him down.
"The banks didn't want to take the risk with me, as I had
never taken a loan in this country before and I didn't have
much for collateral."
One major credit union (name called) was willing to take
the chance and lent him the money. Ricky recalled that his
loan was approved within a matter of hours after speaking
with the credit officer and within a few days of joining the
union, opening the account and purchasing some shares.
Ricky said the credit unions did not have the impersonal
feel of banks and he felt as though he could relate "man to
man" with the official. Ricky said credit unions were more
understanding when he was late with payments and gave him
the time he needed to catch up. He has since built a relationship
with the officer, has paid off his initial loan and has taken
others to acquire his other vehicles. Through his taxis, Ricky
has been able to build a home and educate his children, now
Ricky said, he often refers others to the officer, who in grat-
itude, sometimes pays him "a little something" for the refer-
If Ricky's case were to be considered under some of the
new provisions for credit unions, according to Remy's argument,
Ricky would not be able to access the original loan that was
able to provide him with so much.
The new measures include among other things, more strin-
gent criteria for the investment of member funds and tightening
up on the number of non-performing loans, a category Ricky's
loan may have possibly fallen into on more than one occa-
The ease with which Ricky was able to get the money may
also be a thing of the past.
However, the fact that Ricky might have turned out to be
a bad customer and not repay the loan at all, as well as the
potential cost to the union must also be taken into account.
Multiply that situation by several hundred customers, several
thousands of dollars and a bad economy, and the potential
for another HCU or First National is very real.
In a recently released CariCris rating of the Eastern Credit
Union, the agency cited two of the ECU's major weaknesses
as being its "weak credit-risk management and operational
controls" and "a large non-performing loan portfolio."
With 160,000 members and $1.5 billion in assets, the ECU
is, in terms of membership and asset base, the largest credit
union of this country. As such, if its credit controls have been
found wanting, the question of what may be occurring in the
smaller credit unions is a legitimate one.
Remy has asked that the Central Bank and the Finance Min-
istry dialogue further with credit unions to find the middle
ground between these two positions, because the current bill
does not reflect it.
"This time, it is difficult to say there is a middle ground
because the bill puts credit unions under the control of the
He also said that the credit union movement is willing to
accept an "enhancement" of the Commissioner of Co-operatives
role, while his office still remains in control of credit unions.
Remy also does not see his call to the trade unions as politi-
cising the issue, saying that there are direct "linkages" and
synergies between the two organisations.
He expressed hopes that this engagement between all parties
would happen soon.
Meanwhile, the members wait.
SEPTEMBER 14 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
NEWS | SBG5
Two sides to consider
From Page 4
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