GET INVOLVED, COME ON BOARD
While a credit union will not replace the full functions of a commercial bank, it is certainly the start of something great for the residents of TCI. I know that many of us will be fearful to get involve because of the demise of TCI Bank, however, we must not let TCI Bank fiasco deters us from this initiative. It can work and it will work. One way to ensure the depositors are protected is to ensure there is insurance on the depositors’ money. The article will highlight the success of credit unions in the Bahamas and will explain the operations of credit unions.
Credit Unions in the Bahamas
The Bahamas which is one of our closest neighbours is progressing well with credit unions despite the fact that they have so many banks there. The Bahamas has nine credit unions, of which three are for the general public and the remaining six are for specific membership such as for churches, law enforcement and teaches. The Bahamas Cooperative Movement has over 405 million dollars in assets with over 40,000 members. The Bahamas is also in the process of legislating insurance for depositors’ money.
What is a credit union?
A credit union is a financial institution that is owned and controlled by members.
How do credit unions work?
Members deposit funds and those funds are used as loans to other members. The interest rate charge on the loan is the income for the Credit Union which will cover the cost of operation.
Can anyone join the credit union?
Credit unions normally comprise of members that have a common interest such as teachers, civil servants, hotel workers, taxi drivers, fisherman, farmers and churches. However, in the Bahamas some of the credit unions are open to the general public.
A credit union member
- must be either a Turks and Caicos Islander or a resident that resides ordinarily in TCI.
- 18 years or older.
- Is of Sound Mind.
- Has in common with other members, occupation or philosophy.
What is the difference between a Credit Union and a Bank?
A Bank is in the business of maximizing profit for its shareholders whereas a credit union is non-profit organization serving its members. In addition, banks are required to have a capital outlay of $3,000,000 dollars while credit unions are only required to have $100,000.
What are some of the services that offered by a Credit Union?
- Auto Loans
- Consumer Loans
- Small Business Loans
- Checking Accounts
- Savings Account
- Fixed Deposits
- Financial Consulting
- Back to School Savings
- Christmas Club Accounts
- Vacation Club Accounts
- Insurance Products
- Mortgage Loans
Who will monitor the Credit Union?
The Financial Services Commission will monitor the functions of the Credit Union. The Commission will also maintain a level of protection for members’ deposits and shares. The Regulations will also prescribe guidelines for the Ordinance.
Is your money safe in a Credit Union?
TCIG can address this by requesting all financial institutions to have depositors’ insurance. A deposit insurance protects the depositors’ funds in the event the Credit Union Fails. We currently do not have any legislation covering depositors’ insurance and so we are encouraging TCIG to put this on their priority list so that customers can feel safe about their money.
Are the credit Unions financial statements required to be audited?
What is the minimum number of members and capital needed to start a Credit Union?
A Credit union Should have a minimum of $100,0000 in capital
The minimum number of members for a credit union should be at least 100 persons.
Conclusion and the Call for A Credit Union Exploratory Committee
Even though the Ordinance was passed in August 2016, the Regulations to give effect to this Ordinance are still outstanding. I note however, in the recent Throne’ speech that the regulations for the Credit Union will be progressedin this fiscal year. It is crucial that the Government make this a priority. Based on the Ordinance, the Regulations are expected to address depositors’ insurance which will provide some sort of relief to customers who are concerned whether their money will be safe or not.
Anyone interested in being on the committee to explore the formation of a Credit Union Committee, please email me at email@example.com or inbox me on facebook. Please note you do not have to be a banker or an accountant to be on the committee, it is open to anyone that is willing to ensure that this project is viable and is a success.