KINGSTON, Jamaica–Reform has begun for Jamaica’s credit unions with regulators agreeing CUs should be codified under their own statute.
The decision comes after 18 years of consultations that have been underpinned by a strategy of devising regulations for the sector under the current banking laws, and was the basis on which the credit unions had been restructuring their operations over the years, according to the Financial Gleaner.
And that remained the expectation up to January of this year, when the Jamaica Co-operative Credit Union League was saying it expected that finally the community banks would have transitioned to central bank oversight in June, the Financial Gleaner reported.
JCCUL General Manager Glenworth Francis told the Gleaner that the government has finally been convinced after nearly two decades that they were taking the wrong approach and have agreed to the drafting of a statue for the movement.
"We said it from the beginning," Francis was quoted by the Financial Gleaner as saying, noting that it was one of CUs’ recommendations when formal negotiations began back in 2000 to transition the credit unions to central bank oversight.
Francis told the Financial Gleaner it has always been credit unions’ belief that their position that the proposed regulations would interfere down the line with the Co-operative Societies Act, the main piece of enabling legislation for credit unions.
"The truth is that a number of areas of the Co-operative Societies Act were being subsumed by the proposed regulations. I can't see where it is possible that a set of regulations can supersede an act," Francis told the Financial Gleaner.
The new law is expected to be called the Credit Union Act. The legislative process is expected to be finalized by year end, while implementation of the new law will extend into next year, according to Francis. It means the long-standing head of JCCUL won't get to see the reforms completed before his retirement, scheduled for the end of 2017, according to the Financial Gleaner.
Once credit unions transition to Bank of Jamaica supervision they will become eligible for participation in the insurance scheme for banks operated by Jamaica Deposit Insurance Corporation (JDIC).
Jamaica is home to 30 credit unions with combined membership under one-million and total assets of approximately $100 billion.