Barbados CUs Move Forward on Deposit Insurance
WOCCU-designed Program Will Strengthen the Country’s Cooperative Sector
March 26, 2010
BRIDGETOWN, Barbados — Credit unions in Barbados last week accepted the World Council of Credit Unions' (WOCCU) design for a program that will implement deposit insurance for the country's financial cooperatives. The program's implementation will not only strengthen the Caribbean nation's credit union movement, but enable it to compete more effectively with foreign banks that currently dominate the island.
"Credit unions are Barbados' only locally-owned financial institutions and serve more than two-thirds of the population," said Dave Grace, WOCCU vice president of association services, who led the design of the deposit insurance system. "It's time that credit union member deposits were given the same level of government guarantee with deposit insurance as those held by foreign-owned banks."
Credit unions' unanimous support for the program came after a series of meetings Grace held with Barbados' policymakers and officials. Meeting participants included Dr. DeLisle Worrell, governor of the Central Bank of Barbados; Dr. David Eastwick, the government's minister of economic affairs; Warrick Ward, CEO of the Barbados Deposit Insurance Corporation; and Ronald Bascombe, secretary of special projects for the ministry of finance.
|Credit union officials joined Minister Eastwick (third from right) in the Barbados Parliament.|
In February, officials from the Barbados Co-operative Credit Union League (BCCUL) attended the Credit Union National Association's Governmental Affairs Conference in Washington, D.C. and participated in Capitol Hill visits with the Iowa Credit Union League. The delegation also met with WOCCU representatives to discuss its deposit insurance design draft and visited with officials at the National Credit Union Administration, the U.S. credit union regulator, to better understand the workings of the National Credit Union Share Insurance Fund, which the regulator administers.
In July 2009, BCCUL contracted with WOCCU to design and help advocate for deposit insurance implementation. The deposit insurance design delivered last week calls for credit union members to maintain a minimum of BDS$25,000 (US$12,500) in deposit insurance, which will utilize the Barbados Deposit Insurance Fund (BDIC). But the design also advocates for establishing a credit union fund separate from the commercial bank fund within the agency, and requires credit unions to attain minimum financial standards to enter into the deposit insurance system. WOCCU and BCCUL hope to have the needed legislative changes enacted later this year.
"It is an important initiative in this era of global financial instability to further strengthen the safety and soundness of the local credit union sector," said Dean St. Hill, BCCUL president. "We're happy with the overall response of key stakeholders. All of us are working together to ensure that members' money is safer than ever."
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented 300+ technical assistance programs in 89 countries. Worldwide, 68,882 credit unions in 109 countries serve 235 million people. Learn more about World Council's impact around the world at www.woccu.org.
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