The Financial Services Commission (FSC) is clamping down on credit unions and directing them to remove millions they have deposited in financial institutions other than commercial banks.
The move has been confirmed by head of the City of Bridgetown Co-operative Credit Union (COB) Steve Belle, who said that the supra-regulatory body had advised that the law governing credit unions only allowed them to place funds in commercial banks.
In an interview on the weekend, Belle said the current low interest rate environment made it difficult for credit unions to earn a decent rate of return on deposits in banks.
The credit union boss’ comments came against the backdrop of reports that credit unions had been asked to pull investment deposits from sister credit union-owned institution Capita Financial.
