Wed | Jul 28, 2021

Credit union segment gets smaller as mergers continue

Published:Thursday | February 19, 2015 | 12:01 PM
Group CEO ofd the Jamaica Cooperative Credit Union League, Glenworth Francis

Group chief executive officer of the Jamaica Co-operative Credit Union League (JCCUL), Glenworth Francis, said the number of the member-owned financial cooperatives will likely be decreased to 34 from the current 37 by year end as more unions complete the process of merging.

The merger of the St Thomas Co-operative Credit Union with First Heritage Co-operative is slated to be completed by March this year, while that of AAMM Co-operative and the UWI (Mona) and Community Co-operative Credit Union is expected to see completion in April, Francis said.

While officials of the St Thomas Co-operative Credit Union have been guarded about their expectations, AAMM Co-operative Credit Union and UWI have cited the expected opportunity of cross-selling products to a larger membership base of 31,000 islandwide.

Two other Kingston-based credit unions are in talks with a view to a merger, Francis said. However, he added that he could not reveal the names as the matter was still under negotiation.

Another credit union source said that Hanover and Montego Bay Co-operative credit unions in western Jamaica are also in talks with a view to amalgamate, following a failed attempt by the Montego Bay outfit to merge with the Trelawny Co-operative Credit Union.

In relation to the failure of the merger with Trelawny Co-operative Credit Union, Francis said that membership in the north coast parish expressed a fear of being overshadowed by the much larger movement based in Montego Bay.

In 2014, the Petroleum Industry Employees Co-operative Credit Union and the Palisadoes Co-operative Credit Union, the latter representing workers at the two international airports, became one entity.

In 2013, Kirkvine, Ewarton and JPS credit unions consolidated their operations, preceded earlier that year by Communication and Workers of Jamaica Co-operative Credit Union and Westmoreland Co-operative Credit Union.

BOJ Regulations

Another senior official within the credit union movement, who preferred not to be identified, said that unions continue to look at combining their operations to meet capital and reporting requirements under the Bank of Jamaica (Credit Union) Regulations.

Under proposed changes to the law, the central bank is slated to become the regulator of the segment of community banks which now comprises 37 credit unions with assets, as at November 20, 2014, of $81.6 billion and membership of just over one million.

Loans at November within the sector was $55.2 billion.

Francis commented that the process of ongoing mergers had thrown up no major problems, stating that "all mergers have gone very well, quite smoothly and all the members are benefiting. Membership (of JCCUL) should be down to 34 by the end of the year."

The Group CEO said that the process of preparing for central bank oversight was advanced, with regulations now in the hands of legal drafters.

Registrar of Co-operative and Friendly Societies Errol Gallimore said in early February that the Department of Co-operative and Friendly Societies has proposed to the Bank of Jamaica (BOJ) several amendments to the Co-operative Societies Act which will need to be executed in order to facilitate oversight of local credit unions.

Gallimore said regulations for the sector under BOJ oversight were ready to be sent to drafters.