Hidden Agendas?

Submitted by Old Onions Bag
Financial Services Commission drops the hammer on credit unions

Financial Services Commission drops the hammer on credit unions

Latest move by Government through a directive coming from the Financial Services Commission (FSC), to curtail the credit unions as to where they can invest, has stirred up a hornets nest. Now investing for them is all but limited to commercial banks and government paper. Really now, how much money can be made with commercial banks, 2 % or  5% on fixed deposits if you are lucky? Can be liken to operating in a piggy bank environment, risk aversive for sure, but at what loss of possible profits?. All that’s left is government bonds and paper instruments. Such directives most probably  have been influenced by the Clico paviova, and a protectionist policy for investors, but could there be more, given that commercial banks’ interest in government bonds and instruments have declined considerably.

So why must the credit unions  always play whipping boy with obvious mollycoddle ? Must these institutions (peoples money) be always corralled to suit others agendas all the time? Why can’t the credit unions be allowed to grow as with most financial institutions, for one, like allowing them their own bank? Surely we could venture a guess, that commercial banks would see an exodus of the ‘peoples deposits’ to where, policies and interest rates and sharing of profits would be much more fertile.

Credit unions you are being served notice….bail bonders extraordinaire‘….


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97 Comments on “Hidden Agendas?”

  1. Hal Austin May 28, 2013 at 10:32 AM #

    @ Caswell

    It is serious. It either goes to the root of FSC competence as a regulator, or to the risk management and governance of the COB.
    More details should be put in the public domain, either by the COB or the FSC.


  2. Caswell Franklyn May 28, 2013 at 10:43 AM #


    It goes to the political interference in what is supposed to be an independent body. The non-bank financial institutions where credit unions invest their funds are all regulated and have been given clean bills of health by the Central Bank of Barbados. There was no problem with these investments by the Registrar of Co-operatives, the former regulator, or indeed the FSC before March 7, 2013. What has change? Did the FSC suddenly loose confidence in the Central Bank, and if so; what does the FSC know about the Central Bank that the rest of us don’t?


  3. Hal Austin May 28, 2013 at 10:47 AM #

    @ Caswell

    I agree and it shows what lengths this government will go to to steal money from ordinary people, but they lack finesse.
    This form of regulation is similar to the choke and rob muggers stealing gold from tourists.
    The next big scandal is going to be the central bank defaulting on retail investors who have invested in gilts.
    Mark my words.


  4. Well Well. May 28, 2013 at 10:51 AM #

    Caswell…………….have you been able to form any opinions yet on why as much as 1 billion dollars of credit union members money runs the risk of being moved to foreign owned banks in Bim?


  5. David May 28, 2013 at 11:00 AM #


    To be clear about what you are intimating. The FSC has been influenced to issue a directive to transfer deposits to banks because of some scheme to force credit unions to by government treasuries. Is this correct?

    Then the follow up concern is did the FSC Sir Frank Alleyne led Board approve?

    BU’s real concern is that the FSC has the right as regulator to direct those for which it has oversight. Did we not express outrage when the Supervisor of Insurance failed to exercise the right of the office under the Act. Could it be the FSC has seen a deterioration in the balance Sheets of non bank entities in Barbados? You are on record on BU being highly critical of Capita.


  6. Caswell Franklyn May 28, 2013 at 11:18 AM #

    The FSC and the Sir Frank led board is one and the same.

    The credit unions have been allowed to make these investments for years by both the FSC and the Registrar of Co-operatives without any problems. Now that Government wants money, it is a problem. I am suggesting that there is more in the mortar than the pestle. I believe that this scheme is a ploy to force credit unions to help finance Government.

    You are correct, I have been critical of Capita in the past and will continue to do so but the FSC is not only giving the directive in relation to Capita.

    What I don’t understand is will the directive apply to the Central Fund Facility Trust which was set up by credit unions to assist credit unions if one of them finds itself in difficulty. The CFF is not a bank.


  7. David May 28, 2013 at 11:25 AM #


    You concern is noted BUT because credit unions have been allowed over the years to deposit at will in non bank institutions does not logically support your argument that it must continue. The financial market post 2008 has changed not just because of CLICO by the declining economic situation.

    The credit unions need to exert their right to get a evidenced based response to the reason for the decision.


  8. Well Well. May 28, 2013 at 11:39 AM #

    Credit union members better stay on top of this, and i mean really on top.


  9. old onion bag May 28, 2013 at 11:41 AM #

    I am reliably informed that this is not going down well with some members of the credit unions (esp.large ones)….as a matter of fact …some have decided to fight this ‘tooth and nail’ even to the point of the Law Courts,… the suggestion is who will be paying for those broken fixed deposits contracts, that are already entered into?….some as long as 25 yrs.


  10. Well Well. May 28, 2013 at 11:44 AM #

    In the real world, first you play, then you pay………….


  11. Hal Austin May 28, 2013 at 11:47 AM #

    The silence is deafening. Credit unions must speak out. If the regulator gets away with this this time they will come again.
    Look at how they raid the NIS fund.


  12. Not Taken May 28, 2013 at 11:50 AM #

    @Hal Austin | May 28, 2013 at 10:47 AM |

    “I agree and it shows what lengths this government will go to to steal money from ordinary people, but they lack finesse.
    This form of regulation is similar to the choke and rob muggers stealing gold from tourists.
    The next big scandal is going to be the central bank defaulting on retail investors who have invested in gilts.
    Mark my words.”

    Article in Toronto Globe and Mail today “As Valeant’s profile rises, tax avoidance will raise ire”


    A bit off topic, but eventually the loss of tax revenue from the offshore industry (Valeant/Biovail/Melnyk et al) will leave the Government with a huge hole in its revenue/cash flow sources, and increase the need to “steal money form the ordinary people”


  13. Well Well. May 28, 2013 at 6:19 PM #

    Caswell……….what a friend of mine alluded to today is that the credit unions will be forced to keep their money in the banking system and none of it can be invested outside of Barbados, whatever that means, maybe you have a handle on that.


  14. Brutus May 28, 2013 at 6:49 PM #


    As reported in the Nation, the FSC issued a written directive to credit unions advising that they must comply with the Section of the Act which restricts certain investments to 10% of the statutory reserve.

    The restriction on deposits is a different issue and hangs on the interpretation of the phrase ” a bank licensed under the Financial Institutions Act”. I do not believe that the FSC has issued any written directive on the matter of deposits held by credit unions, but maybe they wrote only to COB. Is that the case? What is the whole truth Caswell?

    Again as reported in the Nation, the President of the credit union League said that the FSC is working with them to get the matter resolved, perhaps by having the legislation amended.


  15. Brutus May 28, 2013 at 6:53 PM #

    My apologies, maybe the clarification was not in the Nation:



  16. hello May 28, 2013 at 7:11 PM #

    hello | May 28, 2013 at 9:40 AM |

    onions you running from this post?

    onion no comment from Owen on the raging war in and out of court between Payne and Hinckson. They are his fellow MP’s in Parliament the highest decision making body in the land not two year olds bickering over a shirley biscuit. Could it be he is in denial on the BLP implosion?

    Mia and Cynthia were conspicuous in their absence from Owen’s latest rant. Wife beater on the other hand made his presnce known.

    No Owen its not Barbados darkest hour its the BLP thats in a dark place.


  17. ac May 28, 2013 at 8:10 PM #

    the govt injected 11million dollars in the economy yet the BLP yardfowls say the govt not doing nutting for the economy.. they would prefer to give 90million to the people to increased the import bill rather than to spread 11million across several countries which in return would bring in foreign exchange and not add another imillion to the import bill.. the govt plans a meeting to have talks about the economy and them mad .mad mad mad……even jeff broomes not so mad anymore wunna need to take a page out of jeff broomes book …Jeff Broomes wher are u the BLP need your help in recovery.. Please send them a memo ……


  18. newblood May 28, 2013 at 9:30 PM #


    why didnt the other credit uniond get a similar letter?


  19. Caswell Franklyn May 28, 2013 at 10:17 PM #


    You asked

    Why didn’t the other credit unions get such a letter?

    You are assuming that they didn’t. The FSC addressed a similar letter dated March 14, 2013 that I have in my possession to: “All Registered Credit Union Entities”

    Please speak about what you know and do not try to defend the indefensible.



  20. Brutus May 28, 2013 at 10:34 PM #


    Does the March 14, 2013 letter from the FSC, addressed to all registered credit unions, mention anything about deposits?


  21. newblood June 1, 2013 at 2:27 AM #

    u shold recognize by now that i ask questions or make staments to evoke repsonse, let me say to u, i saw the letter and the relevant sections of the act that was referenced. Amen


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