A Parliamentary committee has raised serious concerns over the regulation of the financial institutions and warned that outdated laws and limited oversight could expose hundreds of thousands of members to financial risk.
The issues were highlighted during a public hearing of the Joint Select Committee on Finance and Legal Affairs, which is examining the supervisory and prudential oversight of credit unions.
Committee chair Dr Marlene Attz said that credit unions now control more than TT$18 billion in assets and serve more than 600,000 members, yet it remains regulated under legislation created in 1971.
Officials from the Ministry of Labour and the Central Bank acknowledged during the hearing that the current framework is not fit for purpose.
They cited weak enforcement powers, minimal penalties for breaches, and severe staffing constraints within the Commissioner for Cooperative Development’s office.
Central Bank officials confirmed it is prepared to either regulate the sector directly or support an independent regulator, while stressing that meaningful reform cannot occur without update legislation.
Committee members also expressed concern about insufficient deposit insurance coverage.
They noted that participation in credit union deposit protection remains voluntary, leaving members potentially exposed in the event of a failure.
The Central Bank stated that credit unions may not pose a systemic threat to the wider financial system.
However, it warned that failures could have serious social and economic consequences, particular for vulnerable communities in society.
Lawmakers are pushing for urgent reform to strengthen governance, supervision, and member protection across the credit union sector.
