Government senator today called on the Financial Services Commission (FSC) to extend deposit insurance protection to credit unions.
Senator Lynette Holder was speaking as the Upper House debated changes to the Financial Services Commission Act, amid a raft of proposed legislation: the Charities Bill, the Companies Amendment Bill, the Corporate Trust Service Providers Bill, and the Money Laundering and Finance of Terrorism Control Amendment Bill.
Senator Holder said: “I am calling today for the Financial Services Commission in its review and efforts through this amendment to look at best practises and how it operates here in Barbados to ensure that they comply with commissions the world over but that it also seeks to protect this very critical sector within our society and work with the credit union movement to put in place deposit insurance that would allow our 205,000 persons some semblance of security.”
Holder said credit unions had helped thousands of Barbadians from all walks of life over the years.
She declared: “The average person from St Lucy, St Andrew, St Peter right through to St Philip, St John has been able over time to turn to this indigenous institution for access to credit.
“They can have access to mortgages, access business loans. They can purchase their vehicles etc. through credit. There was a time in this country you could not save within the commercial bank the laws did not allow that and they were able to.”
Senator Holder continued: “The credit union movement in Barbados has done well in being able to enfranchise ordinary people. At December 2018 the credit union league would have shared data in their audited finances that suggest that there are sum 205 000 people in the movement and that is a 74 per cent penetration rate in Barbados… second only to Dominica within CARICOM.
“We are told they have assets under management of $2.4 billion and some 33 active credit unions. This movement is making a significant impact not only the economic landscape of Barbados, but socially.”
The senator urged the FSC to bring the credit union in line with other non-banking institutions which already had deposit insurance.
“As we look to broaden the scope and encourage the commission considers now protecting this critical sector as is the case for non-banking institutions. I am calling for this consideration to ensure we can protect the credit union sector.”
Individual deposits in banks up to a maximum of $25,000 per customer are protected against loss by bank failure by the Barbados Deposit Insurance Corporation (BDIC), created by Act of Parliament in 2006, during the Owen Arthur administration.