Credit unions reach agreement on deposit insurance system

BRIDGETOWN, Barbados: The nation’s credit unions have accepted the World Council of Credit Union’s (WOCCU) design for introducing deposit insurance to the sector.

The WOCCU found unanimous support during a series of meetings which included the Governor of the Central Bank, Dr. DeLisle Worrell; Minister of Economic Affairs, Empowerment, Innovation, Trade, Industry and Commerce, Dr. David Estwick; the CEO of the Barbados Deposit Insurance Corporation, Warrick Ward and the Permanent Secretary of Special Projects in the Ministry of Finance, Ronald Bascombe.

The deposit insurance design calls for credit union members to have B$25,000 (US$12,500) in deposit insurance; utilize the structure of the Barbados Deposit Insurance Fund (BDIC), but to establish a credit union fund, separate from commercial banks, within the agency and for there to be financial standards for credit unions to enter into the deposit insurance system.

WOCCU and the Barbados Cooperative Credit Union League (BCCUL) hope to have the necessary legislative changes enacted later this year.

“Credit unions are the only domestically-owned financial institutions in Barbados and serve over two-thirds of the population,” said Dave Grace, WOCCU Vice President, Association Services and lead on designing the deposit insurance system.

“It is high time that their members’ deposits are afforded the same level of government guarantee with deposit insurance as the foreign-owned banks.”

In July 2009, the BCCUL signed an agreement with WOCCU to provide consulting services to design and help advocate for the implementation of deposit insurance.

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