A Credit Union Bank, Good Idea?

Consultant Sir Courtney Blackman (right) and credit union executive Hally Haynes – photo credit: Nation

He said that only one CEO of a Credit Union disagreed totally. “Another CEO was enthusiastic about the initiative, which he considered vital to the growth and development of the Movement,” he said.

Barbados Advocate – 5/28/2012

There is a saying that the devil is always in the detail. Last week former Governor of the Central Bank Courtney Blackman – contracted to do a study – gave his support to the idea of the credit unions in Barbados owning a commercial bank. It was instructive to listen to the former Governor at a press conference last week flanked by Hally Haynes from the Barbados Credit Union League. He gave his support to the idea. Truth be told there was no mention of the business plan – if any exist – and what are the ‘money’ considerations. He referenced feedback from credit union members or what the marketers refer to as qualitative information. In his words,  “The large majority of Credit Union members interviewed supported in principle, the establishment of a Bank by the League, but several expressed various reservations”. It is positive that credit union members are supportive, buyin is obviously needed from the membership to move forward.

Of concern to BU is the revelation by Blackman that one credit union is not supporting of the idea. The Barbados Advocate article quotes Blackman, “… only one CEO of a Credit Union disagreed totally. “Another CEO was enthusiastic about the initiative, which he considered vital to the growth and development of the Movement”. After investigating the matter the credit union opposing the idea was identified in the Business Authority as the City of Bridgetown (COB). Using deductive reasoning it is not hard to conclude that the other credit union enthusiastic about the idea is Barbados Public Workers Cooperative Credit Union (BPWCCU). The recommendation afterall is for Capita to be transformed into a bank.

Why is this information important? After BPWCCU, COB appears to be next in line. How can we have a decision to establish a bank owned by the credit unions and COB is not part of it? A visit to the World Council of Credit Union website shows total assets for credit unions in Barbados as USD733, COB’s website shows total assets USD160 and BPWCCU’s USD420. BU readers can do the math to appreciate the impact COB’s non participation is likely to have on the success of the Barbados Credit Union League to establish a bank. The question therefore is why was this not addressed in more detail by Governor Blackman et al? Why did the media practitioners present at the press conference not press for feedback on this matter?

It is no secret that Caswell Franklyn, an expert in these matters, has ‘stridently’ listed his position on BU. Why establish a bank? Why not amend existing legislation to allow credit unions to offer services not currently allowed?

Do we need more information about the pros and cons about the credit unions, very successful to date, establishing a bank? How about asking COB’s CEO why they are not onboard with the idea? We need transparency in our affairs now more than ever.

0 thoughts on “A Credit Union Bank, Good Idea?

  1. The acquisition of CLICO Mortgage Finance Company by Public Workers Credit has proven to be an albatross around the neck of that credit union and they want to unload it upon gullible credit unions.

    A credit union is essentially a bank that caters to members only. A bank owned by credit unions would only serve to compete with the credit unions themselves. Barbados is a small market so where would you get the customers of the banks from? The answer is very simple, the new banks customers will come from the credit unions just like Capita is draining Public Workers.

    The acquisition of Capita was done contrary to law but it had the support of David Thompson who was more concerned with getting money for CLICO than following any law. The acquisition of a bank by credit unions would provide major jobs for some unscrupulous credit union executives who could not land a decent job without defrauding the credit unions as is now the practice.

    Unfortunately, the politically influenced Financial Services Commission has neither the expertise or the will to rein in these crooks.

  2. @ David

    Why are you pushing these issues which all seem to be designed to force the Bushman to put licks in his Chairman elect of the National Supervisory Committee?

    …you are a born gallows bait fuh truth…. 🙂

    Listen folks, any money paid to Sir Courtney to do this study would have been a waste of credit union money. Hopefully this was a pro bono affair….
    It is a NO BRAINER that the credit union movement should own a bank in Barbados…… EVA SINCE!!

    How can you be moving millions of dollars around each month and not be interested in the banking business?

    The only problem here is that the Credit Union movement has outgrown the vision of its leadership. These are a set of people who still mainly are looking to see who can get to go on a trip somewhere and how much per diem they can pay themselves without being voted out next AGM.

    it is no surprise that Sir Courtney would support the idea…. Probably took him all of three minutes to make up his mind.

    That Steve Belle objects is again no surprise. Steve is a sound administrator who can be relied on to do what needs to be done, but who has no track record as a developmental visionary when it comes to the advancement of the movement …. He is probably just concerned with how it may impact his day to day functions…

    Caswell is an excellent guardian of the rules, upholder of righteousness and guardian of the purse…. . But again he has never been known for developmental vision nor for any outstanding management acumen.

    These two should be ignored on this issue.

    Indeed, as Bushie pointed out previously, Caswell was also of a similar view when Doyle, Browne and Cap Durant were pushing the General Insurance Company that is now owned by the movement.
    Indeed, he effectively led a revolt which saw the movement split between the large and small credit unions.

    Is that not the same Cooperators General Insurance now building that massive complex in Collymore Rock…?

    Caswell should prepare himself for the job offered by the Bushman and leave these more complex issues to Sir Courtney and to Bushie…

    • David

      You have to forgive Bushie, he is out of his depth on this one. He does not understand what a credit union is all I try to explain to him. He seems to be married to his wrongheaded opinion and no amount of coercion can get him to separate far less divorce his views.


      What is the difference between a bank and a credit union in the Barbados context? The restrictions on the credit unions came as a result of of an effective lobby by the banks and insurance companies. All that is needed is a policy decision by the Government and those restrictions are gone. When the Government needed credit union support in trying to off load some of their assets that was the opportunity to make demands. But these clowns were too happy to be seen at breakfast meetings with the Minister than to put forward any initiatives that would benefit the movement.

      When the credit unions purchased shares in BNB and ICB the law as it was then forbade such but the Government (Arthur Administration) took a policy decision to ignore the law. I wrote to him and pointed out the law and asked for an amendment to accommodate their proposals but I was ignored. They disobeyed the law and then changed the it sometime afterwards.

      Again, I want to point out to you that I was never in opposition to the concept of the League establishing an insurance company. I was the one who proposed the setting up of the insurance company on the floor of the League after some information had fallen off a truck and I found it. I opposed the entity that the people who you mentioned had established. I went to the Corporate Affairs Office and obtained copied of the by-laws which showed that your friends were trying to dupe the movement. It was my efforts that caused them to effect changes to the by-laws so that we now have the entity that is now in existence. Check you memory: it might be playing tricks on you.

  3. Bushie

    With respect how does Caswell calling for amendment to the law to allow credit unions to offer a few services which they don’t currently have different to what you have espoused?

    Doesn’t the CEO of COB represent the view of the Board currently chaired by James Paul MP?

  4. @David

    I am neither for or against the concept, but I think i like Caswell’s idea push for amendent to the legislation. To answer your question, remember that CEO of COB was the CEO of BPWCUL and he was forced out an there might still be bad blood.

  5. Blogger2012

    You opinion of Steve Belle is far from the truth. Yes he was dismissed from Public Workers but that was because he refused to do the wrong thing at the behest of certain members of the board. However, he is not harbouring any bad blood over that incident because since he became CEO of COB he gave work to the same person who fired him when that individual was down on his luck. Steve might be a lot of things but I find that you can rely on his professional advice, and I am not saying this because his views reflect mine on this issue.

  6. Caswell

    Give us an estimate of the following: (broad numbers would do….)

    1- How much does the co-op movement pay monthly in bank fees?
    2- how much does CREDIT UNION MEMBERS maintain in SEPERATE Bank accounts in order to do transactions not easily done in the credit union?
    3- Do you have any idea how much INCOME is generated by a bank on a monthly basis? This is not a liability to the Credit Union, it has the potential to provide significantly enhanced LEVERAGE to the movement…. Just as Cooperators has done….
    4- how many NON CREDIT UNION MEMBERS do you think would patronize a well run LOCALLY OWNED bank?
    5- what credit union is what bank what? That is a myth that you have been mouthing now for decades…..and there has been NO change in the reality.

    Easy solution…… Start a bank!!!

    You think that Bushie or Sir Courtney born yesterday…? 🙂

    • Bushie

      I don’t know when you were born, and I know that Sir Courtney wasn’t born yesterday but if I want to be exact, I would have to check with Sir Allan Stanford, oh wait I can’t check with him he’s in jail for fraud isn’t he?

  7. David
    Caswell is right you know! CREDIT UNIONS are really banks… Just owned by the customers.
    BUT this is Barbados!!
    For decades now the credit unions here have been manipulated into restricting their operations and their vision and have been effectively EXCLUDED from the banking community.

    …Dont ask Bushie why …. And have to listen all over again about how certain groups who finance politicians have been able to manipulate the system to suit their own benefits….

    Anyway, the. POINT IS, that here, credit unions are NOT included in the banking community as happens in the US,Canada etc.

    Now they can respond (as Caswell is suggesting) by insisting on having the way made clear to force the banks to accept credit unions into their network…. (good luck!!)

    …..or just own a bank.

    It is a no BRAINER….

    • Ok BT, to move the discussion forward, Is the recommendation to use Capita as the foundation of the concept a good one?

  8. Now David, imagine owning a bank and having a committed body of 30,000 members or about 30% of the working population….

    Suddenly, interest rates become much more transparent….

    Suddenly, loans for business purposes become much more available…

    Suddenly, support is available and a model is created that leads to the establishment of a Cooperative Supermarket and distribution sector….
    …..surely you get the drift…

    Where there is no vision, …… The poor will only get poorer…

  9. What Capita what?

    Why would we want to start with a millstone around our necks…?
    Capita is just a scam that was conceived to take pressure off CLICO by their lawyer…

    Just look for the smallest cheapest bank available and buy it… Or get a license and start “The Cooperative Bank of Barbados”… A minor project for the movement at this stage…

  10. @David

    The CEO normally works behind the scene to get support for a concept if he has an interest in it moving forward.


    I didnt know why he was fired, but i assumed that you know what u r talking baout on this one so I shall retreat.

  11. @ Caswell
    LOL…. Good one!
    Bushie has an unfair advantage on you… Knows you too well…
    The truth is that you really agree with the bushman, but you tend to get bogged down with some details that then makes you cut your nose to spite your face…

    Capita was a mistake… Weak gullible credit union leaders under the influence of tainted politicians…. But that does NOT mean that a good idea of a bank is not a good idea.

    If Stanford was operating in the Credit Union he would have been run off within months. …. Especially with someone like you on the supervisory committee, board or even just a member… 🙂

    The Cooperative concept is a MUCH better system of governance than any other option available. It exemplifies transparency and FOI. Even if Sir C made an error of judgement with Sandford it is not transferable in the same way to the Credit Union.

    You seem to be failing to appreciate that a Credit Union Bank CAN be run just like a credit union. It needs not follow the loose secretive model in the current banking system. Indeed, that should be exactly the objective.

    @ David
    Why recommend CAPITA?
    1 – it provides an easy answer.
    2 – it is what they want him to recommend (why the hell else did they need a ‘consultant’?)
    3 – it gets the support of PWCCUL which would now like to dump Capita

    The problem is that a bad start usually leads to a bad ending….
    For example that would likely mean that the existing staff of Capita would move over….
    …big mistake!

    Any such bank needs to be staffed with the highest possible level of professionalism and expertise.

    • @BT

      In light of the recommendation where do we go from here.

      To be honest BU was under the impression Sir C was briefed to come up with a businesscase based on the public mouthings of Hally Haynes. Was this the case?

    • What we have at present is a series of cross-border banks, owned by Canadians, Trinidadians and Bermudans.

      To be clear, with the sale of Butterfield bank(pending final regulatory approval) it will mean ownership concentration confined to Canadians and Trinidadians.

    • David

      Sir Courtney was a consultant of BPWCCUL for years, coming in to Barbados from Antigua and meeting secretly with persons from Public Workers board on Sundays.


      I maintain that Sir Courtney was tainted by Sir Allan and now at BPWCCUL he was associating with persons of the same ilk, thankfully though, not with the same financial strength.

  12. It is simply incontestable that Barbadian credit unions (and trade unions and other mutuals) should be given legal authority to carry out the functions of a balance sheet bank. All it will take, as has been pointed out, are amendments to existing credit union legislation.
    What is clear is that the credit unions would not work cooperatively simply because each CEO would want to be boss. This is part of contemporary Barbadian culture.
    The net result of this is the destructive Barbadianisation of jobs, even if the person appointed is clearly inexperienced or even incompetent.
    If the credit unions were to go ahead and create a retail bank they should make sure the person appointed to head it should be the best available, What they should do is to appoint a number two to train under that person, is s/he is not Barbadian, so that in time the position passes to a Barbadian, but one who is well trained and competent.
    The simplest answer, and one staring us in the face, is for the government to turn the 18 post offices in to post office banks, but with prudent balance sheet policies.
    Everything is in place. Post offices already perform many of the retail functions of a retail bank government would be able to buy the technology off the shelf, the training of staff will be minimum, it can be rolled out as a soft launch, starting with the rural post offices, ironing out the basic launch problems, then bringing it to the big ones.
    What we have at present is a series of cross-border banks, owned by Canadians, Trinidadians and Bermudans.
    Apart from the regulatory issues this structure presents – regulating a subsidiary is different to regulating a branch.
    Most important of all, it has serious implications for the financialisation of local businesses.
    So, for senior regulators to say that it is an advantage for Barbados to have a large number of Canadian owned banks shows his ignorance of financial regulation or of financialisation in general.
    The quality of the debate we get is a reflection of the knowledge of the people making the decisions.
    A credit union bank, yes, but also a post office bank. Then Barbadians should remove their savings from these foreign-owned banks and bank with locally domiciled ones. We pay a high price for our ignorance.

    o matter where he os she comes from. Whast they should do is appointe ARvi

    fr togetherd
    4 adBarbados nd

  13. food for thought.

    The Globe and Mail

    Published Thursday, May. 31 2012, 6:13 AM EDT

    CIBC, Canada’s fifth-largest bank by assets, made $811-million, or $1.90 a share, in the quarter. That compared to profit of $767-million, or $1.80 a share, during the same period last year.

    Canada’s largest bank made $1.56 billion, or $1.01 a share, on continuing operations in the quarter, which was slightly lower than what analysts were expecting. That compared to net income of $1.68 billion, or $1.10 a share during the same quarter a year ago.

    The Bank of Nova Scotia reported $1.3-billion in net income attributable to common shareholders in its second quarter of 2012, compared with $1.5-billion during the same quarter last year.

    I will leave it to the BU financial maguffees and Bushie to analyze given the ownership of Banks in Barbados.

  14. The real obstacle in the way of removing restriction on credit unions is the fact that co-operatives cannot make campaign contributions, like banks do, even though one credit union executive member has found a way around that by getting the credit to purchase substantial amounts of fish fry tickets.

    The growth of the credit union movement is being hindered by hand to mouth politicians from both political parties. They only see the credit unions as a way to invest in their hair-brain schemes where they and their friends can benefit.

  15. Back in the day we had Bourne, Lewis, Boyce, Doyle et al who led (showed vision) to the credit union movement – who are those people doing the job today.

    • David

      Today we have Paul Maxwell who has taken over the movement, not only Public Workers. Unlike those that you mention, it is done for his personal benefit. He runs the show and determines who gets elected, usually his half wit cronies. By way of example, he was out of work for five years, after leaving Cable and Wireless: he needed a job so they negotiated the purchase of CLICO Mortgage Finance Company, and guess who ended up as CEO – Paul Maxwell! Amazingly, the purchase was not approved by the membership, but that did not stop the Registrar from approving the purchase after all it had the backing of Prime Minister David Thompson.

    • @Caswell

      Wasn’t mention made of the purchase in the minutes and therefore members had a chance to challenge the transaction?

      It seems inconceivable that a credit union would spend millions to keep a person(s) employed. Buying a CLICO asset to relieve the government of embarrassment over CLiCO seems more plausible.

    • David

      Both statements are true that is why they were able to get away with it. Unfortunately, the people who attend meetings don’t have a clue about credit unions and mostly attend for the food.

      You don’ read in the minutes that the credit union purchased a business, the board is required to bring a resolution to a general meeting for approval. They knew that they could get away with that because the new breed of members are not aware of the rules and procedures. By law they are required to train members but they don’t in order to get away with this type of abuse.

  16. David,
    Barbadians are just simply disappointing, considering the resources invested nationally on education.
    You would be surprised to know that in an organization of 20000 members, even if 500 attended a meeting, the whole session tends to be dominated by the 10 or so with all the information.

    Those special persons like Caswell (and there are a few others like him) can be sometimes treated very badly when the seek to raise concerns. The problem is that the general members, rather than seek to get to the bottom of the matter and do the right thing, often are cowed into submission and allow the leaders to do what they want to do…. Even your ‘WHO is WHO’ that may attend.

    ….but then again you may not be surprised, cause Bushie saw you at more than one meeting…. 🙂

    • David

      Those persons go to the meetings and generally don’t say anything. Let me explain how it works. Errol Gay was one of the persons who used to attend and put the board under pressure. That came to an end when the board organised an awards ceremony and gave him a token and a cheque for service to the credit union. Interestingly enough, he accepted but has never served on any committee elected or otherwise. Now he is one of the persons who heckle when someone is trying to get the board to explain.

      The AGM is now a picnic with people arriving and registering their attendance and go directly to line up for lunch and then promptly leave. Some of the persons on that list do not even set foot in the meeting hall.

  17. BTW has anyone read today’s Nation editorial? Some of the questions are irrelevant but it is good that at least they are asking.

  18. @David
    What Nation what?!?
    Long time now Bushie explained that the Nation is the popaganda arm of those external evil forces that have targeted Barbados for domination.
    You Play that you can’t see that….

    A Credit Union owned National Bank would throw a HUGE spanner into their plans…. can you imagine what would become of BNB (Republic) bank in a short time if a PROFESSIONALLY managed, well run LOCALLY owned bank came on stream???? Especially one owned by BAJANS through the Credit Unions and NOT through the Crooked, “bribable” politicians….?

    It is no wonder that they will push Steve Belle and Caswell’s concerns in an effort to squash this initiative. Those ‘questions’ are all condescending TRIPE, and are clearly intended to raise unfounded fears among normally sheeplike Bajans.

    “Who will share the retained earnings” my behind!!!
    Do they actually mean who will share the retained earnings instead of TRINIDADIANS as is currently the case….?

    Those ‘Bajans’ running things at the Nation should be tried for treason….

    Let’s see what kind of balls Halley have…..

    • David

      I was only defending myself. Carl should have stuck to complaining about noise, that is his niché.

    • @Caswell

      He vowed not to comment again on BU but it is obvious from his letter to the editor he finds the time to read your submissions…lol (sorry Carl, abbreviation for ‘lots of laughter’)

  19. Well well, a Credit Union Bank or Credit Unions being allowed to function like banks (whether or not they are accepted by the Banking community) would see a mass exit of Banks from Barbados starting with the BNB and a drying up of Barbados’ access to major capital markets around the world. It will certainly lead to the drying up of major revenues to both political and the removal of the phrase “moral suasion” from the local vernacular … HA HA HA HA HA … MURDA …! The Supervisor of Banks would be axed and a major slice of the activities of the Central Bank of Barbados terminated. Ba’bados would collapse as a viable economic entity within a few years … HA HA HA … The problem is that without a crystal ball, non a wunna could say otherwise … MURDA …!!!

  20. @Caswell

    How should members categorise the offline visits by Sir C? Were these visits on the clock? Were these meetings minuted? What was the objective?

  21. BAFBFP is, to put it mildly, talking nonsense. Where is the evidence. A Barbados-domiciled bank would be the best thing to happen to the financialisation of business in Barbados since the end of the Second World War.
    In fact, a more competitive local bank will see the robbery by the Trinidadian, Canadian and Bermudan banks coming to an end and the treating of local customers with due respect.

  22. Hal Austin,
    a local competitive Barbados-domiciled bank cannot possibly offer the “services” established International banks can. International banks have their tentacles well planted are all over the world.

    Are you suggesting a Barbados-domiciled Internationally aged bank?

  23. If we have local banks in Jamaica, T&T,St.Lucia, Grenada, Antigua and other jurisdictions which are successful, why not in Barbados?

  24. A locally-owned balance sheet retail bank would not need to offer the so-called services that international banks offer. Those services are what we call wholesale banking, such as securitisation, derivatives, etc. A balance sheet bank would offer a current account, a notice account, credit cards with a limited credit, secured lending to individuals and small and medium enterprises, and mortgages to account holders with savings.
    This is the kind of service that a credit union bank should offer, with the add-ons including ATMs, direct debit, standing orders, and so on.
    Anything beyond this will be venturing in to the area that led to the banking crisis. What are these services that international banks offer that a balance sheet based bank would need to offer?
    The real problem with banks is their flawed business models – borrowing short (ie on the inter-bank market for anything from overnight to three months) and lending long (ie mortgages for anything up to 25 to 30 years).
    A good example of this is that most businesses have assets of about 30 per to their liabilities; banks traditional had about 12 per cent assets to liabilities, which, during the boom years, they drove down to as low as eight percent. Basel 111 is driving this up to 18 per cent, but not for another six years.
    If everyone who had savings with a bank went to withdraw their money the banks could not cope. There would be a run on the bank. Banks operate on the principle that if some account holders withdraw money, others would deposit savings.
    This is the problem, added to which is that in Western democracies banks do not have to report their finances in the way that other businesses have to. They do not have to account for their liabilities in the same way.
    We need a Barbados bank. This was the serious mistake made by Arthur, selling BNB..

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