‘We are not banks’

THE President of the Co-operative Credit Union League (CCUL), Gary Cross, who is also head of the large Eastern Credit Union (ECU), has made it clear what the credit union movement is all about. He told the Governor of the Central Bank, Ewart Williams: “There is a creeping concept that we are banks or near banks.  We  state categorically that we are not. We cannot out-bank banks, but we certainly can outdo banks with the quality of our service delivery and with the closeness and intimacy with our stakeholders.

“One of the major banks operating in this country returned a year-end profit or after tax profit in excess of $750 million which exceeds Eastern’s entire asset base.  So there is really no competition,” emphasised Cross. He was at the time giving the feature address at the 31st annual general meeting of ECU and his remarks were specifically directed to Williams who delivered the feature address. Cross explained that ECU’s focus is to be a dynamic, financial cooperative, delivering superior quality service to its membership, in accordance with sound business principles.

“We use effectively, the mechanism of savings mobilisation through the co-operative pooling concept and on-lending to those amongst us in urgent need of support and assistance, and with our resolve to perpetuate education to make us masters of our own destiny. “Our mission is not for profit, not for charity, but for service.” Cross said last year, Eastern achieved some major milestones.  Its assets increased by 17.7 percent from $499 million to $588 million, and its last asset count as at the end of February 2005 stood at $603 million. Cross also had something to say about ECU’s subsidiary, EPL Properties Limited. “In 2003, after six months of active trading, EPL achieved a surplus of $250,000 and in the year 2004, there was a gross profit in excess of $1 million,” he said.

Cross took time out to make out the case for credit unions in light of Government’s position to work towards a “single” regulator for the financial system as a whole and its  announced decisions to bring some credit unions under the regulatory authority of the Central Bank. For his part, the governor of the Central Bank said: “Legislation intended for commerical banks is generally inappropriate for credit unions.” He acknowledged that credit unions were different from commercial banks, because of a number of essential features.

He emphasised: “It is difficult to disagree with the Credit Union League that splitting regulation between two regulators, runs the risk of fragmenting the movement and stunting its development.” But he was quick to say that the draft credit union Supervisory Bill which was prepared in the Ministry of Finance, may be a useful starting point for new credit union legislation. “The current draft needs much work to be workable, but it’s a starting point,” declared Williams.