St Francis Xavier Credit Union directors say Central Bank not playing fair but reassures members

By Aaron Humes: Following their ‘unilateral suspension’, the Board of Directors, Credit Committee, and Supervisory Committees along with the General Manager of the St. Francis Xavier Credit Union Limited (SFXCU) have sought to reassure members that there will not be further turmoil, even as they insist they have not been given fair play in their dealings with regulator the Central Bank of Belize.

In a press release issued on Saturday, the Credit Union accused Governor Kareem Michael, acting as Registrar of Credit Unions, of deciding “to violate the rights of each and every registered member who are the sole owners with authority to the administration of their business with the SFXCU. The directive carried out by the Registrar is one without justifiable cause or reasons at a time when the SFXCU’s administrative performance clearly highlights growth, performance, liquidity, and stability as per the yearly financial reports in just eight months of the newly elected board and committees.”

The Board further notes the contradictions as highlighted in our article published on Saturday between the Bank’s claims of critical internal weaknesses and flaws and its insistence that members’ monies remain safe and urges him to reconsider his “wrongful approach”. The Credit Union maintains that it is complying with the demands of corrective measures by the regulator and watching over the business of its member-owners.

The Credit Union also disclosed a letter from President of the Board Everaldo Puck to Governor Michael in response to a “show cause” letter issued by the Bank. Puck directly accuses the Governor and the Bank of abusive behaviour and “general conduct unbecoming of a Registrar of Credit Unions;” a determination to remove the duly elected leaders of the Credit Union and setting “unreasonable deadlines” and acting on “unproven allegations,” citing a report he described as based on a “witch-hunt” organized by the former Board of Directors. He adds that the Bank has moved “apparently to ensure failure as a basis to now claim non-compliance as the pretext for imposing fines and other drastic measures, consistent with the particular insult suggesting the lack of capacity of the elected members to manage the affairs of the credit union.”

The Board asks that the Registrar should allow an appropriate time for the Board to govern the affairs of the Credit Union as was intended by the members who elected this Board before any actions or penalties are imposed on the Credit Union,” and notes “that at this point there is no chaos or disruption of the business of any kind or any ongoing exposure of financial losses to the members. Further, the Registrar is also aware of measures are already in place to prevent or minimize such exposure.” It also requests that the Bank not hurt member-owners by forcing fines that would draw from the Credit Union’s resources.

On Friday, Governor Michael acknowledged “valid concerns” of a run on the Credit Union but insisted that with the Bank’s support, the Credit Union can be “reconstructed” to go even further than it is now. As for why it took so long to act, he stated that there had to be a “natural course” dictated by the Credit Unions Act as to when and where his powers as Registrar could be used.

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