“The Co-operative Societies Act is a harmonized approach to strengthening supervision and resilience within credit unions. Today, we continue the journey toward a more resilient cooperative sector. The new act, and by extension the draft regulations we are here to discuss, aim to address perceived vulnerabilities and governance challenges that have become more prominent over time. This updated framework introduces provisions that go beyond the protection offered in the 1999 Act.”
Executive Director of the FSRA, Nathalie Dusauzay, highlighted that the new act offers enhanced protection for members’ funds, modernizes the sector to align with international standards, strengthens risk management and overall stability, and enhances regulatory oversight by expanding the powers of the Registrar of Credit Unions.
“With regard to the regulations, there are key aspects that stand out. First, corporate governance has been strengthened, with the role of the President now clearly outlined, further enhancing governance. We know that credit unions are managed by a board of directors, and the President plays a critical role in this structure.”
The act also strengthens the roles of other board member with supervisory and credit functions, It outlines the underwriting, provisioning and approval of loans and how delinquent loans are to be treated. The consultation brought together representatives from the 16-registered Credit Unions and the Credit Union League to craft a regulatory environment that supports growth and integrity of the financial system.
“Today’s consultation is a crucial opportunity to ensure that the regulations accompanying this act are fair, feasible, and effective.”
Extensive discussion took place regarding the introduction of a mandatory annual licensing fee, now required for cooperatives to maintain their operating licenses. This change aligns with practices in other ECCU jurisdictions, where credit unions have been subject to similar fees since 2012.
“So, I believe it will always be a heated topic when you have to pay more than you already do, considering all the expenses one has. However, I think that supervision is important. We must ensure that people’s funds are safeguarded and properly administered, which comes at a cost.”
The FSRA has conducted several consultations with the Credit Union sector in the development of the Act and its regulations. It is hopeful that this final round of consultations will complete the regulatory framework and bring the new Cooperative Act into effect on January 1, 2025.