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From the March-20, 2002 issue of Credit Union Times Magazine • Subscribe!
Suriname delegation learns about relationships between U.S. CUs and regulators
<p>WINSTON-SALEM, N.C. - The chances are most people in the U.S. have never heard of the republic of Suriname, formerly called Dutch Guiana. Located in northeastern South America, Suriname has a population of less than 500,000. It is also home to about two dozen credit unions that are facing the first major overhaul of the country's financial services regulations in more than 30 years that could ultimately alter the supervisory framework of the country's financial services system, "legitimize" credit unions and allow them to offer more services. With so much at stake, a delegation from two of the largest credit unions in Suriname and the Central Bank of Suriname which is in charge of the Department of Supervision over the country's banks, credit unions, insurance and pension funds, spent two weeks recently in North Carolina visiting with the league and credit unions, and in Washington, D.C. and Virginia in what one delegate described as "an exposure tour to better understand from a regulatory perspective how the credit union system in the U.S. works." The delegation from Suriname included: Ingeborg Geduld Nijman and Agnes Choennie from the Central Bank of Suriname; Carlho Wijdh and Harold Jap A Joe from GODO CU, the largest credit union, and Andre Misiekaba and Reginald Tjon A Kon, from De Schakel CU, the second largest credit union in Suriname. The group's itinerary during their two-week visit from Feb. 22 to March 11 was sponsored by the National Credit Union Foundation and was part of the North Carolina Network - Suriname Partnership, included attending CUNA's Governmental Affairs Conference, NCUA, the North Carolina Credit Union League, and several credit unions in North Carolina. They also spent time meeting with Jerrie Lattimore, administrator for the North Carolina Credit Union Division, and chairman of NASCUS, and Tony Knox, from the NCCU Division. "We don't want simply to copy U.S. credit unions, but to take back ideas with us and determine if and how they can work for credit unions in Suriname," said Wijdh. Marc Schaefer, president/CEO, Truliant FCU, Winston-Salem, N.C., one of the host credit unions for the Suriname delegation's visit, described the visit as, "a historic opportunity to help the Suriname Central Bank realize the potential of credit unions in serving their population and draft new financial services regulations accordingly." Schaefer lived in Suriname for four years. He completed a World Council of Credit Unions People-to-People and Credit Union Strengthening project in Suriname in 1997. The other principal North Carolina host credit unions that the delegation visited were American Partners FCU in Reidsville, Victory-Masonic Mutual CU in Winston-Salem, and Firestone CU in Wilson. Nijman said the Central Bank of Suriname already has a first draft of a new supervision code. Beyond that, she said, "We want to get ideas about what can be included that will allow Suriname credit unions to grow." By U.S. standards, even the largest Suriname credit union - GODO CU - would be considered extremely small - US$4 million in assets and 16,000 members. De Schakel CU, the country's second largest credit union has US$500,000 in assets and 4,000 members. Only a couple of Suriname's credit unions have what is referred to as "open bond," meaning anyone can join. The majority are "closed bond" and tied to employers, and most of these are very small, typically with about US$2,000 in assets and 11 to 15 members. Credit unions in Suriname are seen as "basic financial service providers" - they offer time deposits, loan services such as mortgages, auto loans, lines of credit and micro enterprise business loans, and growth savings account for children. They are not allowed to offer checking accounts. Nijman said relations between the country's seven banks and credit unions are "cooperative." But the financial services landscape in Suriname is changing and credit unions are part of that evolution. Just as there are no longer any Dutch-based banks in Suriname - the last one was sold to Trinidad-based Royal Bank of Trinidad in December 2001 - so too, "People in Suriname are becoming more aware of credit unions," said Nijman. Suriname's credit unions currently serve less than 10% of the population. "Regulation is coming one way or the other, we see it's coming. We want credit unions to be part of the dialogue and be a part of shaping what's coming," said Mike Beall, People-to-People program coordinator for WOCCU. One of first tasks Nijman and the Central Bank of Suriname want to tackle is to set up definitions that allow it to specify "what the financial institutions are and aren't so that there will be a clearer distinction among the providers," she said. Now there is just a vague, general description. This has made it difficult for the Central Bank to supervise the country's credit unions, Nijman said. The Central Bank, which reports to the Minister of Finance, also wants to implement safety and soundness guidelines for credit unions. Credit unions also are not required to be licensed to operate. Looking at a listing of the country's credit unions, for example, Nijman said she could immediately point out four that the Central Bank knows haven't been active. "But there is little we can do, we can't close them," she said. The only way a credit union can be closed is for members or a court order to shut it down, a policy Nijman said makes members very vulnerable. The new code describes actions the Central Bank can take if a credit union doesn't comply. Jap A Joe said, "Credit unions realize we may have to give a little to get a little, and we are prepared to deal with the new laws and regulations if it means we'll be able to offer new services. We welcome the framework of having certification as government regulated entities to be able to operate better." -</p> <p>firstname.lastname@example.org</p>
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