HCU doesn't have protection of CU stabilization fund

The President of the Credit Union Stabilization Fund says the Hindu Credit Union (HCU) was not a member of the fund and its members, shareholders and depositors do not have the protection for their investment that the fund offers.

Dr Anthony Elias told the media only 38 of the 120 credit unions in Trinidad and Tobago have joined so far, noting that some of the country's big credit unions are not members of the fund.

“As per the guarantee offered to credit unions, the stabilisation fund provides coverage to individual shareholders of credit unions who are members of the fund up to a maximum of $50,000 in shares and a maximum of $50,000 in deposits,” Elias said.

That means that had the HCU been a member many of its clientele would have nothing to worry about since their investments and savings would have been secure.

As an example of how credit unions benefit from the fund, Elias noted that the fund would pay members and shareholders of the Neal and Massy South Credit Union Cooperative Society Limited, which was placed into liquidation by the Commissioner of Co-operative Development in November 2007.

He said shareholders of that credit union may get back as much as $100,000 each from the fund and that they would get the money before the end of the year.

He said each shareholder of the Neal and Massy South Credit Union would receive 100 per cent of the value of their shares in the credit union and 100 per cent of their deposits up to the maximum of $50,000.

Elias said the rules don not make it mandatory for credit unions to join the nine-year-old organization.

Any registered credit union can join by submitting an application and a financial report for the most recent three year period to ensure that the credit union is viable.

He explained that member credit unions must buy one $100 share in the fund and pay a premium of one per cent of their shares and deposit at that point.

The fund continuously monitors its members and offers technical assistance to member credit unions which are experiencing difficulty in meeting prudential standards, he said.