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Apr 21, 2017

Central Bank details reasons for liquidation of credit unions

Central Bank Governor Joy Grant has responded to News Five via email following our story of Thursday night. The Bank in its capacity of registrar of credit unions is moving to liquidate the Citrus Growers and Workers’; Civil Service; Police; and Mount Carmel Credit Unions. In the case of Citrus Growers and Workers, Civil Service, and Mount Carmel Credit Unions, these are insolvent, unable to pay their debts. The reason that the Police Credit Union is dissolving is more surprising: it does not have the twenty-five members required under the Credit Unions Act to continue functioning. Governor Grant writes, (quote) three of the four credit unions that are to be liquidated reported several years of losses that eroded their capital. The poor financial performance also was attributed to high levels of non-performing members loans, large debts owed by the credit unions to the Social Security Board and the Development Finance Corporation, and significant unreconciled balances; hence the decision, pursuant to Section sixty-nine of the Credit Unions Act, to liquidate these credit unions was made. (Unquote) The S.S.B. and D.F.C. are also foreclosing on the headquarters of two of the unions. The thirty-day notice published at the end of March is sufficient as according to the Bank, most members should be aware of the issues with their unions and were so informed by their respective managements. There is an option to appeal, which the Bank says would need to be accompanied by a viable restructuring and recapitalization plan. The selected liquidator, according to the Bank will attempt to liquidate as much of the assets in order to pay liabilities. If there is anything left over members may be able to recover their monies but that is not guaranteed. In the case of Mount Carmel, two employees were criminally charged with embezzling but the charges were dropped and we understand that none of the stolen money was repaid. That credit union has been under administration since 2001 and the Bank says it considered all possible options, including mergers with other credit unions, restructuring loans and accessing capital and grant funding.

 

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1 Response for “Central Bank details reasons for liquidation of credit unions”

  1. jorge says:

    So, the small people are going to loose their money?? In the case of The Citrus Growers, there are rumours that one rich grower borrowed all the money and did not pay !!!

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