The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Governor of the Central Bank said there is a “minimum standard” for financial institutions for issuing bank accounts for non-profit organisations.

Raquel Thurston, programme manager for Abaco Strong, told Tribune Business she is “tired of the run around” her non-profit is getting from the commercial banks in their attempt to open a bank account. “There needs to be more regulation in place for non-profits,” she said.

“It’s definitely been a challenge getting the account opened, but bearin mind Abaco is just getting its wheels turning again and most of the banks here on the island are fairly new. But the biggest challenge is that every bank has their own guidelines and set of documents that they need and it has been like a wild goose chase just getting all the documents they are asking for.

“There is no set standard and I think the Central Bank needs to step in and make a decision on what the guidelines are and what the standard should be.”

John Rolle, governor of the Central Bank, told Tribune Business that each bank can set their own guidelines. He added, however, the Central Bank does set “minimum requirements,” but it is still up to the individual bank to do “due diligence” on the board members of the non-profit.

Mr Rolle also said: “The minimum standard for financial institutions is that they need to understand what the entity is doing. They need to also understand the individuals because with all relationships banks have a duty to understand the people who are behind it beyond just the legal entity.

“So I know that banks will often undertake inquires to understand who may be the sponsors or the officers who are involved with an organization, similar to what would happen if somebody is opening up a relationship for a company as opposed to a proprietorship.”

These items “aren’t usually difficult for people to satisfy,” he added. Also in the case of non-profit organisations, commercial banks ask for proof of registration as a non-profit, and non-profits need to first be registered with the Registrar General’s Department and obtain a “certificate of registration” in order to be in compliance with the Non-profit Organizations Act, 2019.

Ms Thurston admitted the first time she approached RBC in Abaco last year her non-profit was not registered, but now they are registered and tried again with RBC and also now with FirstCaribbean. FirstCaribbean is asking them for business licence in addition to National Insurance Board cards and passport as proof of identity for all of the board members, which Ms Thurston says, “Most of the members of our organization are expats and they don’t have Bahamian IDs, so there is no way they are completiing that requirement.”

A representative of FirstCaribbean spoke to Tribune Business and said this matter is one for the Central Bank and that FirstCaribbean does not make the rules. A representative from RBC responded to questions on the same and said that their position on non-profits remains the same and they “support non-profit organisations in general”.

Along with being a registered Bahamian non-profit, Abaco Strong is also a US 501c3, which it was operating in The Bahamas under prior to becoming fully registered in January.

Ms Thurston also said: “I’ve been a banker for 16 years so I kind of get it that persons in the bank are trying their best to follow regulations because there are regulations in place and I know one of the banks told us that we needed to be registered in The Bahamas. That took a while but I think it took a while because the government was changing over, but once it got picked up again it went through pretty quickly. So we have the registration.

“So all of the documents that were needed to be registered in the US we have, so we basically have everything that they would have asked for.

“So after we registered as a company we went back again to our bank to say this is what we have and RBC and Commonwealth Bank was so overwhelmed with customers that they could not give us an appointment.”

The banks also could not provide her with an adequate list of what was required of her ahead of time so she could get it prepared for an actual appointment date and instead kept “running us around” after months of waiting and anticipation.

She said: “This is bank and it is also regulatory. That’s how I feel and it’s not clearly regulated by the Central Bank. It seems like every bank is making their own decisions and have their own standards.”

For example, Ms Thurston started dealing with FirstCaribbean and they have asked them for a business licence along with the proof to registration. “We got the business licence and after being run around by RBC we went to FirstCaribbean and we tried to work with them, but now they are asking for passports and NIB cards, but most of our members are second home owners, so they don’t have Bahamian identification. The registered company has an NIB number, but that is insufficient as the bank wants each individual board member to have one, plus the NGO (non-governmental organization) itself has to apply as if they are applying for an account. So that’s a lot of paperwork we’re working on for that,” she said.

Operating without a bank account for Abaco Strong is problematic to say the least as they have to have money wired in to members in order to pay contractors out of a petty cash facility, which they have to continually update whereas a bank account keeps an accurate record of what the organization is doing on a weekly basis.

The Non-profit Organizations Act, 2019 has come under scrutiny for being too stringent in its approach and essentially handicapping non-profits from getting bank accounts. However, the Act is clear in non-profits needing to be registered to open a bank account. In this case with Abaco Strong has been registered as of January.

Martha Fleury, president of Abaco Strong, added: “We are just trying to pursue a couple of banks to see where we can have success, the fastest we can provide information they then ask us for more information. So we’re just trying to comply in hopes one of them will come through.”

Abaco Strong was founded after Hurricane Dorian, 2019 by several “community leaders,” and they have been working towards rebuilding Abaco and providing humanitarian assistance for residents on the island if they need supplies of food items. “We’re also in the process of building a community aquaponic garden. So we’ve all worked in many different communities and Abaco just really tried to facilitate long term rebuilding,” Ms Fleury added.