East Caribbean: Strengthening Credit Union Regulation and Supervision
This project, which was completed in 2007, provided technical assistance to strengthen the self-regulatory practices among Caribbean Confederation of Credit Unions (CCCU) members, which manage 70% of the assets of the sub-region: strengthening the regulatory framework and self-regulatory prudential practices throughout the Organization of Eastern Caribbean States (OECS) system.
Given the systemically important role played by the Caribbean credit unions, the OECS member countries decided in August 1972 to establish a regional organization for credit unions and other co-operatives as the successor to the West Indies Conferences of Credit Societies. This regional organisation was called the Caribbean Confederation of Credit Unions.
Increasing sophistication in consumer choice and demand was exerting pressures on bank and credit union managers to adopt creative business responses in order to retain market share and operating efficiencies. The governments were unable to introduce regulatory regimes over credit unions because of budgetary constraints and the credit unions and CCCU recognized that there was a strong need for strengthening the regulatory and supervisory environment at the OECS level. The CCCU was FIRST’s primary counterpart for this project.
The CCCU is the apex organisation at the OECS-level sub-regional credit union sector. The sector is organized with a three-tiered structure with credit unions at the local or primary level and the primary societies organized into national leagues. At the time of the project, the CCCU consisted of 18 national leagues with approximately 1.5 million credit union members in 353 credit unions. The mission of the CCCU and its affiliates is to increase popular participation in the financial markets, to expand savings mobilisation from the productive sector to support the goals of the job creation and increased incomes in rural and urban families, and the CCCU to become the sub-regional regulator for the credit union under the authority of the Eastern Caribbean Central Bank (ECCB). The CCCU is an affiliate member of the World Council of Credit Unions (WOCCU), which represents over 100 million members of the credit union movement world-wide.
The main outputs of this project included:
- Stabilization/deposit guarantee program launched and implemented
- PEARLS monitoring & reporting systems designed and implemented
- Accreditation and certification program for credit union directors, volunteers and regulators introduced and sustained
- Improved anti-money laundering (AML) legislation and procedures for credit union activity
One of the lessons was that coordinating technical assistance among so many beneficiaries requires strong organization and communication and even then significant delays can be expected at each stage. Handling this needs to be reflected in the project budget to avoid loss of momentum.
- Supervision and examination manual. This is useful manual covering off-site and on-site supervision of Credit Unions and should be of interest to other jurisdictions where Credit Unions play a role in the financial sector
- Regional Stabilization Super Unit- mechanisms for dealing with problem Union
- Regional Savings Guaranteed Operating Policy
- Regional Savings Guaranteed Insurance Fund Policy