5 months ago
22
JCCUL, the umbrella body which acted as overseer of credit unions, is itself in the process of transitioning to a new role now that the community banks are to be placed under the watchful eye of the central bank.
Robin Levy, CEO of the Jamaica Co-operative Credit Union League, says that the laws under which the movement is being reformed will allow for JCCUL to become a ‘credit union to credit unions’, as a provider of services to the community banks.
The league had long been faced with the dichotomy of acting as regulator of the sector while being owned by the entities it monitored. Ceding the role, he said, would be in the sector’s interest.
“We are happy to give up that role to the Bank of Jamaica and the Department of Co-operatives to focus even more on driving value to credit unions; doing things for credit unions that they cannot do for themselves,” Levy told the Financial Gleaner.
He added that while discussions with the Bank of Jamaica, BOJ, were ongoing, JCCUL was hoping to become the conduit through which credit union transactions are settled.
The BOJ maintains a clearing house, which allows banks to move transactions through the financial system, including negotiating cheques, interbank transfers and other instruments. Each of the eight commercial banks have designated ‘pockets’ in the clearing house which allow them to move funds in the system and effectively operate.
However, institutions such as investment houses and credit unions are not a part of that system. They therefore must do all their transactions by maintaining accounts with commercial banks, which has implications for the cost of doing business.
JCCUL wants to insert itself into that system as a substitute.
“We’re expecting that we’ll be able to settle credit union transactions with the banks and effectively operate as their banker, so that they can close their accounts with these banks,” Levy said.
JCCUL already plays a similar role, through subsidiary CuNet, as representative of credit unions under the MultiLink payments system, which covers credit and debit card transactions.
Turning to other matters, Levy indicated that JCCUL’s Stabilisation Unit, which assisted credit unions to stay open in the midst of financial difficulties, was considering offering services to members of the movement, to aid with governance, bookkeeping and general operations.
“A lot of these co-operatives, such as fishermen’s co-operatives and transportation co-operatives, are not doing well and they could benefit from the vast expertise that the stabilisation unit has built up over the years,” he said.
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