Critical Deficiencies in Governance at Saint Francis Credit Union

Kareem Michael

An administrator has been appointed to the Saint Francis Xavier Credit Union Limited. Today, the media was called to a press conference by the Central Bank of Belize where the Governor, Kareem Michael, in his capacity as the Registrar of Credit Unions, announced that under the Credit Unions Act of 2011, the appointment of an administrator to the credit union was required for the protection of the equities and interests of the member owners of the credit union. The decision comes on the heels of an examination of the credit union’s operations which Registrar Michael says revealed critical deficiencies in the governance of the credit union. These weaknesses, including unaccountability at the management level, could de-stabilize the credit union and harm the interest of its members. 

Kareem Michael, Registrar of Credit Unions

“Pursuant to section sixty of the Credit Union Act. The said examination was conducted between July and August – it actually commenced on the eleventh of July last year – and a report was provided to me. On the fifth of July 2022, I also placed the credit union under a regime of enhanced supervision by appointing onsite examiners to review the day-to-day operations of the credit union. The board continues to disregard its fiduciary responsibilities under the Credit Union Act to provide strategic direction to ensure that risks are properly managed and establish sound cooperate values and conduct, thereby compromising the safety and soundness of the credit union. The board’s noncommittal responses to address the grave issues uncovered during onsite examinations are strong indicators that the board is not equipped or disposed to discharge its fiduciary responsibilities to members and depositors of the credit union. The culture of unaccountability at the management level continues to result in subjective decision-making and self-dealing practices while discounting the risk and potential losses to the credit union. The committees are ineffective in their roles of managing credit and in providing unbiased objective review of Saint Francis Xavier Credit Union’s risk management, governance and internal controls processes.  For these reasons, I have concluded that the appointment of an administrator is required to protect the equities and interests of the member owners of Saint Francis Xavier Credit Union.”