MADISON, Wis. — As cooperatives continue to evolve in Cuba, George Joseph will be at the forefront of professional relationships that may develop from the possible creation of Cuban credit unions, if only to better serve his own credit union's Cuban-American members.
"If this does happen, we want to be at the very least a ‘fast follower' in this effort," said Joseph, president and CEO of $640 million Dade County Federal Credit Union in Doral, Fla. "We're preparing for what we believe will be an emergence of Cuban credit unions and we don't want to be left in the dark."
Dade County Federal is one of numerous South Florida credit unions that have expressed an active interest in working with World Council of Credit Unions to help Cuba establish its first credit unions. The clamor for involvement in the Cuban initiative, which World Council undertook earlier this year, has only increased since the international trade association and the DMA Group led an educational visit for credit union and trade group executives to the island in October.
Changes in Cuba's economic and political policies starting in 2011 and the resulting emergence of a growing number of cooperative enterprises have created a need for more effective financial alternatives to fund small business development. Credit unions are both philosophically and operationally best suited to meet those needs, according to World Council President and CEO Brian Branch.
In addition to benefitting Cuba, such development also would be good for the U.S. credit union movement in a variety of ways, Branch added.
"The benefits to U.S. credit unions include the strengthening of remittance ties and financially connecting family members in Cuba and the U.S., not to mention the continued expansion of the global credit union community," said Branch. "Similar ties have been very important in aiding the financial development of Mexico and other Central American countries and could be very important to Cuba as well."
Cuban-Americans play a large role at Dade County Federal, comprising nearly half the institution's 100,000 members and roughly the same percentage of board and staff members. Joseph believes active relationships between U.S. and Cuban credit unions — should the Cuban government ultimately allow financial cooperative development — would aid Cuban residents and better connect them with their U.S. relatives.
"I'd like to see the Cuban government go all the way in opening itself up to trading with America," Joseph said.
Gustavo Machín Gómez, deputy general director of the Republic of Cuba's Ministry of Foreign Affairs (far right) discusses the need for greater economic capital with Cuba educational visit last month.
Doug Samuels, president and CEO of $3.4 billion Space Coast Credit Union, shared Josephs' sentiments and his member commitment. The Melbourne, Fla., credit union has a significant presence in the Miami-Dade County area and a large percentage of Cuban-Americans among his 300,000 members. Samuels acknowledged that some older members still harbor resentments against the current government, but an increasing number of younger members see the value in establishing an open relationship, especially when it comes to financial services.
"Deep emotions govern the issue for most Cuban-Americans, but there are political as well as practical sides to this question," Samuels said. "The ones who lived through the revolution may still be negative, but their kids don't feel that way. If the current barriers between the U.S. and Cuba are removed, I believe they will interact naturally."
One of the greatest issues has to do with remittances, which University of Havana research has determined comprise as much as 68% of the income for the island nation's 11 million people. Most of those remittance dollars come from family and friends in South Florida, which gives area credit unions both opportunities and obligations when it comes to the establishment of a Cuban credit union movement, according to Patrick LaPine, president and CEO of the League of Southeastern Credit Unions, who participated in the October visit.
"From a credit union standpoint, Cuba is literally unchartered waters," said LaPine, whose group represents credit unions in Florida and Alabama. "There is a huge opportunity for credit unions to provide savings, lending and other financial services, and as more cooperative businesses emerge there will be even greater need for things like capital, financial education and other services. Credit unions are really well-suited to provide these types of services."
LaPine's interest in Cuban credit unions began six years ago when he first arrived at the league. A poll of his member credit unions earlier this year netted strong support for working with World Council in helping develop a Cuban credit union movement.
"From a partnership standpoint, there are a lot of opportunities in different areas of support for Cuban credit unions in lending, management and finance," LaPine explained. "We can offer Florida credit union personal that could provide the necessary training and expertise as well as staff that could operate seamlessly in the Cuban culture."
Initial discussions during the October visit indicated interest from Cuban government and banking officials in continuing the growth of Cuba's economy through more private sector cooperative business development, both to take financial strains off the government and help Cuban citizens improve their income and their lives, said Branch. But more discussions need to occur, including greater cooperation between the two governments themselves and the continued easing of restrictions that still stem from the U.S. economic embargo against the largest — and closest — Caribbean nation.
Common Ground
"We have found common ground with Cuban government in compliance with international money laundering and anti-terrorism financing standards, but we heard from Cuba's central bank how difficult it is to access the database to meet those standards," Branch said. "We have carried that message to the U.S. State Department and the Cuban government as they move ahead constructively on these areas of mutual interest."
As the two governments find more effective ways to work together, World Council and various U.S. credit unions and their trade groups will continue to explore opportunities to help a Cuban credit union movement emerge, Branch said. There is still a lot of ground to cover, but initial steps have been taken in the right direction, steps that reflect the interest and enthusiasm of Florida credit unions.
"We're like any other credit union in that we exist to serve the needs of our members, many of whom happen to be Cuban-American who have authentic links back to the island," Samuels said. "We're interested in what happens with Cuba because they're interested in what happens. That's why we need to be involved."