CUJ Snapshot: International Issues Explored
LAS VEGAS-During the 1 CU Conference, Credit Union Journal asked international CU representatives: What issues are affecting credit unions in your home countries that Americans might not realize?
Cyril Lebert, Jamaica Teachers Association Co-Op CU, Jamaica
The Jamaica Credit Union League used to be our regulator, but there is a pending takeover by the Bank of Jamaica, which will be the new regulator of credit unions. We are in negotiations to make sure the changes favor us as much as possible. One example is it was proposed that a minimum of $20 million be put together to start a new credit union. This would have been very bad, because many credit unions are quite humble. We argued and remonstrated until we got the minimum down to $5 million, which was as low as they would go.
Another example is unsecured loans as a percentage of loan portfolio. Credit unions are limited to not more than 10%, while banks have greater leeway. We are trying to increase the percentage for credit unions. Indigenous banks in Jamaica melted down in the 1990s, but credit unions stood firm. We say this is because we are good managers of our business and we know our members, so we should be allowed greater leeway.
Jacinto Villarreal, COFEP, RC, Panama
There is one government entity that supervises a wide variety of industries: from financial services to housing to transportation. Because the regulator does not specialize in any one area, it makes things very difficult for credit unions.
Celeste Foster, COB Co-Operative CU, Barbados
Our regulation structure is different from the United States because our legislative system is British-based. There are so many things U.S. credit unions can do that we cannot. Our credit unions are limited to savings and lending. Only recently were we allowed to start doing mortgages. Small business owners get loans as members of the credit union, not as business owners.
We are just barely getting into Internet banking and debit cards in the last year, and only at the largest credit unions.
Edgar Wilson, First CU, New Zealand
Because of the financial crisis credit unions are facing increased legislation and are being lumped in with finance companies that caused significant loss of money in New Zealand. Credit unions have had no financial difficulties, but we are being put in the same regulatory pressure.
Don Farr, general manager of MinnedosaCU, Minnedosa, Manitoba, Canada, and director for CU Central Manitoba, Winnipeg
The centrals for Manitoba, Saskatchewan and Alberta are looking to merge to form one central to look after all three provinces. The proposed merger has been controversial or positive, depending on the province. Credit Union Central Saskatchewan owns a trust company and there is a debate over its value and how ownership would be shared.
Barry Forbes, president and CEO, Westminster Savings CU, Vancouver, Canada
In order to continue to provide services credit unions need, the three centrals that are talking about merging need to get bigger and more sophisticated-because some credit unions are bigger than the centrals.