Faced with the grim prospect of the premature death of credit unions as they are known in this country today, the Cooperative Credit Union League of T&T (CCULTT) has gone on the offensive to prevent the possible disintegration of the 500,000-strong movement. The league’s president, Joseph Remy, is claiming that this could become a chilling reality if the Government goes ahead with proposed legislation that would, among other things, change the fundamental structure of those entities.
Remy, also the secretary general of the Communications Workers Union (CWU), said the legislation includes putting the regulatory controls of credit unions in the hands of the Central Bank, and stringent academic requirements for members who wish to serve on the board or committees.
Q: Mr Remy, are you all crying wolf in this current impasse charging that there is a plan afoot to destroy the local credit union movement?
A: (Hands clasped resting on his lap in his office at the CWU’s headquarters on Henry Street, Port-of-Spain, on the morning of February 12) I would want to say that the movement made a correct call this time around. For years we have not been observing the trends that have been happening within this sector.
What is the correct call?
There is a piece of legislation tabled in Parliament which if passed in its present form it would definitely mean destruction of the cooperative credit union movement, and I want to emphasise the words cooperative credit union movement.
Why does the CCULTT harbour this worrying stance?
Because of the stipulations enshrined in the bill which are very onerous to operate, and it is going to fatally impact the small man’s ability to access economic resources which are not readily available to him in the commercial finance sector.
Before we go further, credit unions are a source of easy access to the lower income class and I dare say, even to some middle income earners. Why do you think the Government would be out to destroy the movement so callously?
(Elbows on his chair’s hand rest) Well, I don’t want to lay the blame solely on this Government because the legislative changes were introduced by the previous administration. To us it is being driven by adherence to international pressure coming from those agencies which the present regime has aligned themselves in this particular instance, the Financial Action Task Force, which deals with anti-money laundering and counter terrorism financing.
You are saying pressure is being placed on our Government to push them in a particular direction?
Yes. And it is pushing them to shape credit unions in a particular way to move them away from the cooperative grounding that credit unions came from. That is dangerous as it is going to eliminate the whole issue of shareholders (credit union members) democracy, because these shareholders are also owners of the movement.
How long ago, Mr Remy, this situation has been brewing, since you said it did not start with the PP regime?
It has been at least six years we have been engaged in discussions with the Government on this matter which also impacts on the whole issue of removing the regulatory control of credit unions from the Commissioner of Cooperative Development to the Central Bank. What is so great about the Central Bank in their regulatory work when they almost caused the country’s whole economic fabric to crash in the Clico debacle?
Why would it be detrimental to the movement if the changes were implemented as proposed in the legislation?
Because the Central Bank regulations are strictly for banking institutions and a credit union is not a bank; the whole construct of a credit union is completely different from that of a bank.
When this first came up did you all raise any objection at the time?
Yes, we did. But unfortunately the movement has been a passive organisation over the years, but we now believe the time is ripe to change our operational mode to be more active agitators for the direction which we should go.
(A mischievous grin) Militant?
You may use that word if you want to, but I would prefer to say more active agitators because we are the owners of this thing and if somebody comes to change the way how you control your property, you as the owner must have a say in how it should be governed and regulated. We are saying this legislation that is being pushed down our throat is not going to be in the best interest of anybody.
Anybody?
(Eyes lit up) Yes. Because it is going to have a severe impact on the whole society, especially the lower end which is where the majority of citizens reside.
Earlier you said it would also mean the end of shareholders’ democracy, can you explain that?
Sure. What has happened is that in the movement presently, every member is an equal shareholder, they have a right to go the annual general meeting and demand and determine the direction the organisation goes. What is going to happen now is that the proposed legislation will restrict the pool of talent now available to each entity to serve on boards and ordinary members would not be allowed to serve on committees.
How come?
Because the legislation is imposing stringent academic requirements to be on a board or a member of a committee...
Really?
Yes. (Grave expression)
So you are telling me that soon a person would need to have CXC, CAPE and university papers to sit on those boards and committees?
Yes, and more than that, much higher and that is the concern we have. The average ordinary citizen who as a shareholder is entitled to be at the helm of their credit union. Another problem we have is the requirement that we have to report to the Central Bank which is going to place administrative burdens on us.
What’s the estimated total number of credit union members in the country?
Approximately 500,000, and the asset base in the movement is also approximately just under $12 billion, which is also a significant contributor to Trinidad and Tobago’s gross domestic product and a major contributor to our domestic stability.
Mr Remy, that membership figure speaks volumes about the performance of credit unions. How is the movement able to attract such a high membership?
Mr Raphael, that connection to the committees with ordinary members is what gives the credit union strength and allows it to serve its membership with a high level of pride in what we are doing. But you know the major concern we have is what is driving this Government to rush this thing when it has the very serious potential for a negative impact on society.
All we are saying is pull back. Look at what happened with the procurement legislation when there was widespread consultation with the stakeholders, and it took some time for both sides to come to a somewhat amicable conclusion. What are you asking for at this stage or is too late to reach some form of mutual understanding and conclusion? Okay. We are asking for the same approach with us. It is not too late because the proposed legislation is still to be debated.
We are asking the Government to let us complete our studies which should be completed around the end of the second quarter this year. We would come to you with our proposals, with our report, so we can both sit and jointly craft legislation that could work in the best interest of the movement.
Finally, Mr Remy, if this bill should become law in its current form would it spell the end of the credit union movement?
Yes. As we now know it. We may still have credit unions but they would not be grounded in the community anymore because they have cleverly left the controls with the Central Bank but the matter of registration would still be with the Commissioner of Cooperatives Development. This legislation would force credit unions to merge then we would not see the emergence of new credit unions anymore and that would be a sad day for this country, and the result would be disastrous.