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MEXICO CITY – Despite the several credit union systems in place here, some operate on the fly and are often unlicensed and unregulated, and with the latest move by regulatory officials to liquidate nearly 200 institutions, even more are slated to shut down. The National Banking and Securities Commission (CNBV) recently recommended liquidation of 192 credit unions here that fall under the `uniones de creditos’ or credit cooperative system. Officials cite shoddy operational management structures as one of several reasons for dissolution. Meanwhile, the World Council of Credit Unions is highly aware of the number of unregulated credit unions, but the organization cites a 1991 law that called for beefing up proper registration and regulations of those that fall under the `sociedades de ahorro y prestamo’ or societies of savings and loans and other systems. “It can be confusing for some because they just don’t know which ones to trust,” said Kecia Doyle, WOCCU’s marketing communications manager. “There is a push to strengthen and rebuild trust.” Only a small number of the savings and loans were approved to operate prior to one of the country’s major banking failures which inevitably caused government officials to discontinue the registration of these institutions, WOCCU noted. At last count, there were five separate credit union systems operating in Mexico, some not supervised and others that don’t take in savings accounts, according to WOCCU. Credit unions first formed here in the 1950s and over the next four decades, membership and assets grew quickly, mainly because of their ties to Catholic church parishes. Today, the Caja Popular Mexicana (CPM) is the largest credit union network in Mexico having more than $400 million in assets and serving nearly 500,000 members in 26 plazas (regional offices) and 365 branches in 24 of 32 states. CPM’s strength lie in the “progress it made to consolidate its credit unions into one institution,” including “unifying accounting systems, homogenizing procedures and expanding service geographically and to lower income groups,” said Ramon Imperial Zuniga, CEO of CPM. “The slow but steady development was nearly killed two years ago during the ongoing crisis of the Mexican financial sector,” Zuniga said, adding that an “inadequate legislative environment, unregulated and unsupervised credit unions were forming and collapsing, taking with them the savings of thousands of people and compromising (their) public image.” The CNBV said that of the 402 credit unions within the savings and loans system here, 210 are “operating normally.” Of those, 59 percent are considered large, with assets of more $1.8 million, 20 percent have assets of $452,592 to 1.8 million and 11 percent have less than that the amount. For the estimated 22 million Mexicans that live in the United States, the statistics are especially important because many send money back home to relatives and friends. Indeed, the $9.3 billion in annual transactions was one of the driving forces behind a “People-to-People” partnership formed in February 2002 between the Texas Credit Union League, CPM, WOCCU and the California Credit Union League. Besides the IRnet remittance program currently in place, the partnership aims to make available transferred funds between differing credit unions and accounts in Mexico and the United States via a shared branching arrangement. Zuniga said. WOCCU-CPM project director Mario Galarraga, who facilitated the People-to People partnership, identified key areas that all involved could work towards, including CPM staff traveling to Texas credit unions to study information systems, remittances, investments and marketing. “One of CPM’s hurdles to offering the IRnet product is its outdated information systems,” Galarraga said, adding that through “internships,” Mexican staff will be able to study a variety of systems, develop a request for proposal and identify a system that will facilitate the dissemination of the IRnet. “If we were to do it on our own, it would take ten years,” Zuniga said. “I’m confident that we can attain our goals in three years.” -

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