By Anthony P. Pierre, FCCA, CA, CFC - Director, Credit Union Supervisory Unit, Ministry of Finance

The Government of Trinidad and Tobago has identified the achievement of developed country status by the year 2020 as the principal developmental goal of the country. This entails the development of a flexible, vibrant and diversified economy, supported by a stable and well regulated Financial Services Sector that can adequately respond to changes in the international environment. Against this backdrop, legislative reform to create enabling legislation and supervision of the Financial System is critical to sustainability and competitiveness. A critical element of a sound Financial System for developed and developing countries is the presence of a strong Credit Union Sector, and so legislative reform has become necessary for the Sector, as it is for the rest of the Financial Systems.

The proposed Credit Union Supervision Act is intended to be an enabling piece of legislation to strengthen the safety and soundness of credit unions, while allowing them to achieve their potential as full-service financial institutions meeting the savings, borrowing and related needs of their members.The World Council of Credit Unions (WOCCU), in the introduction to its model law for credit unions has suggested that the objective of safety and soundness can only be achieved where credit unions operate as specialised financial intermediation organisations, under a specialised body of law and be subjected to a specialised supervisory agency with appropriate skills and powers of examinations, regulation and enforcement.

The proposed Credit Union Supervision Act meets the criteria laid out by WOCCU. It focuses on areas that will improve prudential management and contribute to protecting members’ savings.

It proposes a new regulatory and supervisory regime intended to boost public confidence in the Sector and its ability to be safe, sound and competitive. Copies of the proposed Act can be obtained through the League and members are encouraged to participate in the ongoing debate on the Act’s provisions.