The Barbados Labour Party’s (BLP) credit union appears to be in the red.
This week, the Financial Services Commission (FSC) published a notice indicating that on December 12, it intends to cancel the registration of the Progressive Cooperative Credit Union Ltd, which has been in operation by the political party for decades.
The FSC also published the names of the close to 300 BLP members. The credit union’s office is located at the BLP’s headquarters at Grantley Adams House, Roebuck Street, The City.
The FSC further advised that “interested parties may contact the commission” to make arrangements for the payments of outstanding monies.
Among the list of credit union members were party stalwarts such as former Prime Minister Owen Arthur, who passed away in 2020; and Sir Henry Forde, who recently passed away, as well as former Chief Justice Sir David Simmons and former Cabinet minister Sir Louis Tull.
Ministers
Several current ministers were also listed, such as Prime Minister Mia Amor Mottley, Attorney General Dale Marshall and Minister of Home Affairs Wilfred Abrahams, as well as veteran Member of Parliament Cynthia Forde, who once managed the credit union.
When contacted about this development, Forde said she had seen the notice but stated: “Another person was managing it after my tenure.”
Dr Lynette Holder, chief executive officer of the Small Business Association and a credit union expert who was also involved in the management of the BLP’s credit union, told the Saturday Sun it was not as solvent as it used to be.
“I was involved sometime ago, years ago, not recently. I know that when I was involved every effort was made to try to revamp it and get it operational – get persons to make deposits in it again and there was a lot of promotional activity done at the party level. But, unfortunately, there wasn’t the uptake for it,” she said, as she mentioned competition from bigger credit unions,” she said.
“Most of the smaller credit unions that are unable to meet the prudential standards and operating standards kind of had no choice but to be shaken up.”
Holder revealed that after efforts failed to get the credit union reactivated, discussions occurred about wounding up its operations.
“So, maybe a lot of peoplehave credit union accounts with several of the other larger ones. And so, we were never able really to get this one operating at a level that would satisfy not only the regulators, but the members in terms of growing the deposits and so on that it can offer credit to members.
“So, I’m not surprised that it’s gone this route, where I would assume that those who were still there in the leadership, you know, would have engaged the FSC.
“Even before it went off, those talks were being had to engage the regulator to wind up the society, because it just wasn’t solvent, it wasn’t operational to the level that the regulators would be satisfied with.”
She recalled that there were several efforts to revive it but some BLP members did not even know the party’s credit union existed.
Disappointing
“I think that from where I sit, the disappointing part of it was not getting the interest from those in the party. I remember when I got involved, we tried to revamp it and we were allowed to make a pitch or two at our conference and so on. There were a lot of people that did not even know the party had a credit union. This is why we were trying to revamp it because obviously the strategy was if you can grow your deposits, then you can offer credit.”
She also recalled that there were some loans on the books.
“So there was still one or two members that had loans and that were paying, but it was just not enough to sustain the operations. So you needed to grow deposits or look to maybe merge with another credit union.”
In relation to member deposits, Holder admitted they were minuscule and that an offer would be made on “cents on the dollar”, but she lamented that there was no deposit insurance for credit unions.
“[This] is the point that the credit union movement has been making all the time. If that was so, you know, the deposits would have been insured in this instance. So, we have to wait and see what it is that they’ve agreed to, the FSC, to pay back the depositors.” (MB)
