Credit unions have experienced "significant" growth in assets of close to 40 per cent over the past five years, even as the overall economy struggled.
Recognizing that credit unions are "very important" providers of financial services in the country, the government has requested that The Central Bank of The Bahamas assume regulatory and supervisory responsibility for cooperative credit unions.
The bank said the move reflects a combination of factors, including the growing size and complexity of the sector and important implications for financial stability; the view held by international agencies that the sector should be supervised and regulated by the entity responsible for financial stability, which is the Central Bank, and the desirability for greater consolidation in the domestic financial regulatory space.
Recently, the Central Bank released a consultation paper on the transition of cooperative credit unions to the supervisory remit of the Central Bank.
As a result, a compendium of draft bills and regulations has been prepared with a view to providing the legislative framework that would oversee the credit union sector.
Those draft bills and regulations include: The Bahamas Cooperative Credit Unions Bill 2013, the Bahamas Cooperative Credit Unions Regulations 2013, the Cooperative Societies (Amendment) Bill 2013 and the Central Bank of The Bahamas (Amendment) Bill 2013.
Sonia Hamilton, chairman of the National Workers Co-operative Credit Union, confirmed to Guardian Business that for the past two years the Central Bank has been in talks with the cooperative movement of The Bahamas and the Department of Cooperative Development about switching regulators.
She pointed out that this is not just happening in The Bahamas but throughout the Caribbean and worldwide.
"With a membership of over 39,000 and assets of $301,074 million as of December 31 2012, credit unions have shown adherence to policies and guidelines and therefore the credit unions welcome governance by the Central Bank as they did the Department of Cooperative Development in the past," she said.
"As a means of securing the funds of the members, each credit union has always been mandated to place 10 per cent of its assets monthly to three special funds, namely statutory reserves, liquidity reserves and the stabilization fund. This trend will continue under the new regime."
According to Hamilton, "For nearly 40 years, credit unions in The Bahamas have remained stable and have even enjoyed a growth of almost 40 percent over the past five years and that was in a 'depressed economy'."
There are currently seven credit unions which come under the supervisory purview of the Department of Cooperative Development in the Ministry of Agriculture, Marine Resources and Local Government, and are governed under the Co-operative Societies Act, 2005, along with other cooperatives.
Comments on the draft bills and regulations are asked to be submitted to the Central Bank by December 13.

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