Credit unions in ECCU not to be regulated under banking bill

Chris Hamblin

18 May 2015

The Eastern Caribbean Central Bank was established in October 1983. It is the Monetary Authority for a group of eight British island economies, namely Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.

The Bill's main purpose, as far as we are concerned, is to provide for the greater protection of depositors. The ECCB Monetary Council, at its 81st meeting held on 24 February, agreed to its passage. It thinks of it as an urgent pre-requisite for the maintainance of the integrity and stability of the system.

The Banking Bill hopes to define banking business as the business of receiving funds through:

the acceptance of monetary deposits which are repayable on demand or after notice or any similar operation; and
the frequent sale or placement of bonds, certificates, notes or other securities, and the use of such funds either in whole or in part for extensions of credit or investment for the account and at the risk of the person doing such business.

Banking business is also to be defined as any other activity recognised by the Central Bank as banking practice and which a licensed financial institution may additionally be authorised to do.

Credit unions conduct business of a financial nature but they do not conduct banking business, and are therefore not regulated by the ECCB under the existing Banking Act and will not be regulated under the proposed Banking Bill.