The Barbados Consumer Empowerment Network (BCEN) on Monday formally demanded that the Financial Services Commission (FSC) withdraw its directive requiring credit unions to appoint independent directors to their boards—a move the watchdog described as legally questionable and a threat to community-based governance.
BCEN Chairman Maureen Holder called on the FSC to withdraw the mandate as it applies to credit unions. She said she has formally requested a meeting with the commission’s legal counsel—as was directed following initial discussions with the regulator—to further examine the issue.
“BCEN is also concerned that the FSC’s call for stakeholder input by September 30, 2025, for a new Credit Union Act comes after it has already begun enforcing its mandate,” Holder told Barbados TODAY. “BCEN believes that this sequence undermines principles of transparency, consultation and fairness that should guide regulatory change in a democratic society.
“Credit unions remain a lifeline for many Barbadians, particularly vulnerable groups who rely on them for fair access to financial services. Any measure that alters their governance structure has serious implications for their members and for the wider credit union movement.”
She argued that credit unions are not simply financial institutions, but community-based organisations, built on trust and democratic principles by the members, for the members, and of the members.
Holder said: “BCEN is of the view, based on our research, that while the FSC could frame its directive as an exercise in ‘good governance’, the legal basis is questionable. The FSC relies on the precedent of its Act in this matter, but BCEN is of the view that reliance on ‘precedent’ is not sound, and that the mandate should not be binding on credit unions unless enacted through proper legislation.
“By attempting to impose the requirements of the mandate through its guidelines and supervisory directives, the FSC risks overstepping its authority under both the Financial Services Commission Act and the Co-operative Societies Act.”
She promised to explain “this salient point” further when BCEN’s leadership meets with members of credit unions across Barbados in due course.
Holder noted that the Principles of Good Regulation of the Organisation for Economic Co-operation and Development (OECD)—the Paris-based club of the world’s richest nations that has dominated global rule-writing in the financial services industries—stress that regulators must act within their legal mandate, ensuring that decisions are transparent, proportionate and accountable.
She also pointed out that, importantly, regulators should not intrude upon ownership and governance rights unless expressly required by law.
Similarly, the consumer activist explained that the Financial Action Task Force (FATF) recommendations focus on ensuring effective anti-money laundering and counter-terrorism financing frameworks. FATF advocates a risk-based, proportionate approach. Nowhere would the FATF mandate governance restructuring or require ‘independent directors’ in co-operatives, she insisted.
Holder urged all stakeholders to pay close attention to this important matter, as BCEN provides members with updates based on its ongoing research and consultations.
BCEN is to convene a special meeting with credit union members, at a date and time to be announced, she said.
(EJ)
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