The Tribune

By NATARIO McKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net WITH the Central Bank moving towards bringing all Bahamian credit unions under its regulatory purview, a leading executive told Tribune Business yesterday it was important the regulator recognise that these institutions are not like traditional commercial banks. Nathaniel Adderley, director of cooperatives, told Tribune Business yesterday: "From where we sit I think what will be important is that the Central Bank recognises the difference between a bank and a credit union, and takes that into account in their oversight. "The credit unions are owned by the people who use their services, so there is a slightly different result. The credit unions are not profit-oriented, but we all will agree that if a business is going to grow you have to make some level of profit, although that is not the greatest motive. I think that is one of the main considerations." Mr Adderley said credit unions need to be more active in selling their story and making the public aware of how they operate. "I think credit unions really need to be more proactive in selling the credit union story," he told Tribune Business. "They need to make sure that not only their membership but the general public understand what credit unions are and what they do, so that when you hear the words 'credit union' everybody knows what you are talking about. Some people hear union and think it's related to trade unions. That is something that needs to be addressed in terms of branding and educational programming." Mr Adderley added: "Certainly, the Central Bank has more resources, and I believe that in as much as we have been putting credit unions on track and preparing them for what is expected in terms of best practices in the wider global world, there are still things that need to be done. "Governance is one of them and we have been working to cause that to happen. I see the Central Bank as just an enhancement to much of what we have been doing in the past. Deposit insurance is something we have had on the table for several years now. The regulations have been on the table for several years." Mr Adderley said that bringing credit unions under the regulation of the Central Bank could be highly beneficial, as long as there is an understanding of the primary differences between credit unions and traditional banks. The Central Bank has undertaken a two-year project designed to bring all Bahamian credit unions - and their 38,000 members - under its regulatory regime. Currently, there are 10 credit unions which come under the supervisory purview of the Department of Cooperative Development at the Ministry of Agriculture and Marine Resources, and they are governed under the Cooperatives Societies Act 2005 along with other cooperatives. At end-December 2010, assets of the credit unions stood at $250.1 million, representing an average annual growth of 9.3 per cent over the past five years. The sector's increased intermediation of funds, together with the Government's desire to rationalise the financial services regulatory landscape, have significantly influenced the decision to bring credit unions within the regulatory and supervisory remit of the Central Bank.