Leg­is­la­tion to reg­u­late cred­it unions and oth­er fi­nan­cial bod­ies is cur­rent­ly too weak.

This was the view shared by In­spec­tor of Fi­nan­cial In­sti­tu­tions for the Cen­tral Bank, Michelle Fran­cis-Pan­tor, dur­ing a Joint Se­lect Com­mit­tee on Fi­nance and Le­gal Af­fairs on Fri­day. The JSC served as an ‘In­quiry in­to the su­per­vi­so­ry and pru­den­tial over­sight of cred­it unions in Trinidad and To­ba­go.”

Fran­cis-Pan­tor said while the Cen­tral Bank is not cur­rent­ly the reg­u­la­to­ry body for cred­it unions, the reg­u­la­to­ry leg­is­la­tion over­see­ing these in­sti­tu­tions needs to be im­proved.

She said, “My view­point is at this point in time if it is Cen­tral Bank we stand ready. If it is as an in­de­pen­dent reg­u­la­tor we stand ready. But the main is­sue is that the leg­isla­tive frame­work for the sec­tor needs strength­en­ing. There are a lot of gaps in the reg­u­la­to­ry frame­work and we do need to strength­en that for ef­fec­tive reg­u­la­tor, whether it is the Cen­tral Bank or whether it is an in­de­pen­dent reg­u­la­tor or whether it is the Com­mis­sion­er of Co­op­er­a­tive de­vel­op­ment.”

Nyree Brath­wathe, the Cen­tral Bank’s as­sis­tant man­ag­er for banks and non-banks al­so not­ed that there had been push back from cred­it unions in pre­vi­ous dis­cus­sions con­cern­ing reg­u­la­tions.

“There has al­ways been fric­tion with cer­tain fac­tions of the sec­tor and, as much as over the years we have com­pro­mised,” she said.

“When we were do­ing the 2014 bill one of the most con­tentious is­sues was the gov­er­nance pro­vi­sions. Be­cause that has been one of the ar­eas that has posed a big risk to the sec­tor. We saw an en­trench­ment at the board lev­el, there was no fit and prop­er cri­te­ria and as much as we un­der­stand it is a de­mo­c­ra­t­ic process and it’s mem­ber dri­ven, at the end of the day the cred­it union is re­spon­si­ble for mem­bers’ funds, han­dling it prop­er­ly.”

She said the bank had hoped that while lead­ers of these in­sti­tu­tions may not re­quire the fi­nan­cial ed­u­ca­tion lev­el of oth­er in­sti­tu­tions, it was nec­es­sary to have cer­tain lev­el to en­sure that fi­nan­cial state­ments can be ad­e­quate­ly mon­i­tored.

(Pe­ter Christo­pher)