The Financial Services Regulatory Authority (FSRA) conducted an Asset Review Workshop for Credit Unions on the island. This workshop formed part of what the FSRA termed a Regulatory Interface to provide information and tools to strengthen the financial health of the credit unions as well as strengthen the FSRA’s oversight of the financial sector in Saint Lucia.
The Financial Services Regulatory Authority (FSRA) is responsible for the regulation and monitoring of the financial space in Saint Lucia. This includes Credit Unions, International and Domestic Banks, International Insurance Companies, and the Money Services Business Sector.
The workshop was part of what was termed a regulatory interface. Executive Director at the FSRA, Natalie Desauzey said such exchanges provide information sharing and tools to improve the financial health of the sector which leads to better supervision and monitoring by the FSRA.
“We believe that this educational campaign is quite necessary to ensure that we can partner with those that we regulate in ensuring that policyholders are protected, depositors are also protected.”
She also highlighted the importance of the Credit Union Sector to Saint Lucia’s overall financial space.
“They represent EC$1.4 billion of total assets in Saint Lucia representing approximately 14% of the total asset base of the banking sector in Saint Lucia. Which, is quite substantial. So therefore, the significance of credit unions to Saint Lucia is critical because they are also those that allow for financial inclusion.”
Manager for the International Sector and Non-Banked Financial Institutions at the FSRA, Sancha Gervais-Victor referenced the actions taken by the FSRA for Credit Unions that fall below the benchmark.
“For these credit unions that’s where our prompt corrective action framework comes into play. Our prompt corrective action framework is a guideline to the credit union on progressive actions that the FSRA will be taking on weak credit unions to ensure that failure does not occur at these credit unions.”
“Credit risk is among the most significant risks facing financial institutions,” said Andrea St. Rose, President of the Institute of Chartered Accountants of the Eastern Caribbean. She presented on the importance of the International Financial Reporting Standard no. 9.
“Well, the whole purpose of standards in particular the International Financial Reporting Standards is to enhance comparability between financial institutions. So when you look at the financial statements of one credit union versus the next, you need to know that they are applying the same bases in terms of how they arrive at the provision for loan losses.”
Melvin Edwards, the Programme Director at the Caribbean Development Educators Programme, addressed the issue of a resolution plan for credit unions. He said the regulator has a responsibility to prevent or minimize any deterioration in the operations of a credit union. The mantra being “safety and soundness in the public interest.”
“The whole question on reporting on performance is mandatory. It’s required by law. And therefore, the Corporative Society’s Act as well as the FSRA’s own act as the regulator, combine with other legislation to require credit unions to be continuously accounting for their performance.”
Over 69 participants from 16 credit unions and the Credit Union League were on hand for the workshop. The FSRA aims to have quarterly interface sessions with various stakeholder groups utilizing both in-person and virtual formats.