Madam President,

I am delighted to once again be able to stand in this very special place in order to lend support to the important work that we are doing on behalf of the Bahamian people.

Today, I am pleased to rise on behalf of the Government to support some very significant Bills that advance the Government’s determination to build a stronger and safer Bahamas. This suite of legislation,as well as protecting members of Co-operatives, will enhance the financial services sector of The Bahamas, thereby promoting business and job opportunities.These Bills include the:-

The Bahamas Co-operative Credit Unions Bill; The Financial Transactions Reporting (Amendment) (No. 3) Bill, 2014; The Co-operative Societies (Amendment) Bill, 2014; The Central Bank of The Bahamas (Amendment) Bill, 2014; and The Business Licence (Amendment) (No. 2) Bill, 2014 The Bank and Trust Companies Regulation (Amendment) Bill, 2014

Madam President,

Co-operatives have existed in The Bahamas for decades. Who can forget our Grandmothers and Grandfathers putting money in the Lodge fund for Burial, or participating in an Asue, or getting medical or other insurance through a Cooperative to get with other members an excellent premium? There is a generation of Bahamians the majority of whom went to College because their parents and Grandparents participated in Asue or Co-operatives.These are today’s leaders across The Bahamas.

Again, Co-operatives are not new to The Bahamas. In our Grandparent’s world everyone was pursuing a common purpose and trusted each other. Brothers wanted each other to have a decent burial. Sisters wanted their children to have a good education. They wanted their children to be able to work hard and use their education to enhance their communities and build a better Bahamas. Their trust was seldom betrayed by those who were chosen to administer the Co-operatives.

Today we live in a different world. Co-operatives manage millions of dollars – they are big business. And, regrettably, administrators too frequently betray trust. To this we must add that every financial institution must have in place the means to protect itself from Money Laundering and Financing of Terrorism.

These Bills protect Co-operatives and enhance the second pillar of The Bahamas’ economy, Financial Services. The compendium had been signed off as FATF compliant.Many new job opportunities will be created in the compliance and other fields. I hope that schools and Colleges are advising our young people about the plethora of opportunities in financial services.

The overarching Bill is The Bahamas Cooperative Credit Unions Bill, 2014. This Bill seeks to provide for the registration, continuance supervision and management of cooperative credit unions by the Central Bank of The Bahamas. As noted in the objects and reasons the cooperative credit unions’ industry has registered significant growth over the past 5 years. The assets held by seven (7) credit unionsoperating in The Bahamas wasapproximately US$327.6 million, as of 31 December 2013. Globally, there are 57,000 cooperative credit unions existing in 103 countries which collectively hold assets in excess of $1.5 trillion.

Currently, the Department of Cooperative Development in the Ministry of Agriculture, Marine Resources and Local Government is responsible for the regulation and supervision of the cooperative credit unions. The governinglegislation is currently the CooperativeSocieties Act 205 which, due to its age, does not meet current yardsticks of international best practices.

Consequently, in 2011 the Government of The Bahamas invited the Central Bank of The Bahamas to assume regulatory and supervisory responsibility for the cooperative credit union industry, having regard to three (3) factors:-

recognition of thegrowing size and complexity of the sector ; the view held by internationals agencies such as the World Council of Credit Unions, CFTAT and others that the sector be supervised and regulated by the entity responsible forfinancial stability, which is the Central Bank; and the desire for greater consolidation in the domestic financial regulatory space.

To facilitate the smooth transition of the cooperative credit unions to the supervisory remit of the Central Bank,the Governments secured a two year technical assistance from the CommonwealthSecretariat.A comprehensive assessment of the operations and governance of the then existing credit unions were carried out and strength and weaknesses indentified. The Steering Committee reviewed existing legislative arrangements which were benchmarked against other jurisdictions. The Government also benefited from the feedback from two external consultants. Madam President, I am proud to state that the Government and the Cooperative Credit Union Movement worked together to ensure that this legislative regime aligns with international standard and bestpractices.

Some of the highlights of the Bill include Clause 2 which provides that Credit Unions will be regulated by the Central Bank and Clause 7 which states that the Central Bank is to maintain a register of cooperative credit unionsregistered under this Act. Clause 16 of the Bill exempts co-operative credit unions with assets less than $1 million from some of the reporting requirements such as the need to supply audited financial statements to the Central bank and the need to maintain the statutory reserve liquidity deposit as required by Clause 65 of the Bill. So, small credit unions will not fall under the ambit of this Bill. They will continue to operate as they do now and will not be subject to this Regulatory framework.

Clause 120 (Confidentiality) requires that the information on theidentity, transactions or the accounts of members are to be keptconfidential save and except certain circumstances including:-

Where the credit union is lawfully required to make a disclosure by any court of competentjurisdiction within the Bahamas or under theprovisions of any law of The Bahamas; For the purpose of enabling or assisting the Governor to exercise ay functions conferred upon him by written law; To a person with aview for the purposes of initiation of a criminal proceedings, disciplinary proceedings relating to theexercise of a counsel, attorney , auditor oractuary in the course of his professional duties; Disciplinary proceedings relating to a discharge of a public officer or employee of the Central Bank of his duties.

Clause 126 provides for the transition and registration of Co-operatives under the new Act.

The attendant Bills include the Co-operatives Societies (Amendment) Bill 2014) makes it clear that it is intended that the BahamasCorporative Credit Unions Bill 2014 should apply only to financial Co-operatives. Clause 3 allows for the Director of Societies to have continued responsibility for the initiation and encouragement of organised activities for the Co-operatives. This amendment seeks to foster the continued growth of the credit unions sector and to ensure that start up credit unions will receive appropriate advisory support in their initial stages. When they are ready tooperate, these credit unions will be registered with the Central Bank.

Secondly, Madam President, the FinancialTransactions Reporting Act is to be amended by the Financial Transactions Reporting Act (Amendment) (No 3 Bill). This amendment is critical in that it provides that cooperative credit unions now fall within theambit and meaning of “financial institution” and therefore subject to the provisions and obligations as mandated by the FTRA. This is in keeping with the recommendations of the CFATF.

Additionally, Madam President the Central Bank of the Bahamas (Amendment ) Bill 2014 is also necessary since it seeks to authorise the central Bankto supervise and regulate cooperative credit unions and for connected purposes. Specifically there is a new definition of financialinstitution which includes any person carrying on a business regulated under the laws enforced by the Bank.

Finally, the Business Licence (Amendment) (No.2) Bill 2014 provides that the Apex Body of the Credit Unions, namely, the NationalLeague which is exempt from the paymentof premium tax under the Part III of the First Schedule (Insurance Taxes) to the BusinessLicence Act. Presently, the Apex Body self insures the loans of credit union members.

Madam President,

I return to thoughts about our Grandparents. There is no question in my mind that they would be proud of this compendium. They would be proud of our government which through these and other measures is working hard to put our economy in the best possible position so that as many Bahamians as possible can participate in building a stronger and safer Bahamas.

ANNEX

This Bill meets FATF requirements. The Annex to this presentation sets out recommendations made by CFATF that have been met by this Bill.

In its Seventh Follow up Report dated December 3, 2014 the CFATF stated that:-

“Recommendation 23 As noted in the Sixth FUR, it was concluded that the enactment of the draft Cooperative Credit Unions Bill, 2014 will allow the Examiners recommendation to be fully complied with. The Examiners’ recommendation requires that the functions of the Director of Societies should include the responsibility for ensuring that licensees and registrants comply with the FTRA. The Examiners were of the view that this would facilitate enforcement action for non-compliance with AML/CFT requirements. The enactment of this legislation should be achieved for The Bahamas to be considered to have achieved a level of at least ‘Largely Compliant’ with this Recommendation.

Recommendation 17 Based on the analysis of this Recommendation in the sixth FUR, the only outstanding deficiency pertained to the introduction of ladders of supervisory intervention with regard to the Director of Societies. In that regard, The Bahamas has drafted The Bahamas Co-operative Credit Unions Bill, 2014, which requires the Central Bank’s Inspector to carry out inspections of credit unions for the purpose of satisfying himself that credit unions are complying with the requirements of the FRTA etc. Once enacted, the legislation will be reviewed to ensure that it adequately deals with the concerns noted by the Examiners. There is substantial compliance with R. 17.”