ST. THOMAS- Members of the Committee on Finance, chaired by Sen. Clifford Graham, held a meeting at the Capitol Building on Thursday, to receive testimony on several bills including Bill No. 31-0369; as it relates to the establishment of credit unions and for their oversight.
Gwendolyn Hall Brady, Division Director for the Division of Banking and Insurance said, “Our safest course of action is to require all credit unions be federally chartered and come within preview of the National Credit Union Administration (NCUA).”
Some of the responsibilities of the NCUA are the issuance of interpretative rulings, financial performance reports, legal opinion letters, strict rules and regulations, reviews every three years, and the ability to examine chartered credit unions and issue Administrative Orders when it finds that a credit union or persons affiliated with credit union is in violation of the law, according to Director Brady.
“In your testimony, you mentioned the annual oversight visits of the credit unions by external auditors,” said Sen. Graham, Sponsor of the Bill. “How often are the audits conducted?” he asked. In response, Director Brady said, “The audits are conducted once a year by external and federal auditors. Upon completion, the reports are sent to NCUA for further review.”
Sen. Tregenza Roach said, “NCUA regulation comes with a cost.” He asked, “What costs are affiliated with NCUA?” Brady stated that there are fees that must be paid to NCUA. The formula is based on the risk associated with a particular credit union. The financial portfolio and losses will determine the cost per credit union.
Chief Executive Officer Keisha Prince, NCRM, NCBSO added, “Although, NCUA can be difficult because it comes with a cost. However, their oversight ensures sounds management of credit unions. NCUA performs regulatory services and evaluate credit unions based on capital adequacy, management responsibilities, earnings, liquidity and market sensitivity.”
Sen. Marvin Blyden said, “I support this legislation because it is gives the Territory an upgrade by raising the standards of the credit unions. More importantly, it provides financial protection to the people of the Virgin Islands.
Similarly, Sen. Sammuel Sanes said, “This is one of those bills that makes plain sense.” He asked, “Were the victims of Her Majesty Credit Union reimbursed for their loss?” Director Brady said, “If Her Majesty Credit Union had been a legitimate operation and established under a federal charter through NCUA, then its accounts would have been insured by the National Credit Union Share Insurance Fund, therefore, consumer interests would have been protected.”
Sen. Positive Nelson said, “Updating our laws to keep us in alignment is a very good thing. However, my main issue is that credit unions should have never been authorized by the Department of Licensing and Consumer Affairs because jurisdiction should be under the Division of Banking. If this was the case, regulation of Her Majesty Credit Union would not have slipped through the cracks.”
Ultimately, lawmakers voted favorably for Bill No. 31-0369.
The following measures were also considered and approved:
- Bill No. 31-0443 - An Act amending Title 22 Virgin Islands Code adding Chapter 20 to enact “The Virgin Islands Risk-Based Capital for Insurers Act”
- Bill No. 31-0444 - An Act repealing Title 22 Virgin Islands Code Section 1251(a) and adding Chapter 14 entitled “The Virgin Islands Insurance Holding Company System Regulatory Act” to meet the accreditation standards established by the National Association of Insurance Commissioners and update the insurance laws of the Territory placing them on par with other United States jurisdictions, and providing greater and more effective protection for the policyholders of the Territory
- Bill No. 31-0445 - An Act repealing and re-enacting Title 22 Virgin Islands Code chapter 31 to enact the “Virgin Islands Producer and Adjuster Licensing Act”
- Bill No. 31-0446 -An Act amending Title 22 Virgin Islands Code adding Chapter 60 to enact “The Virgin Islands Third Party Administrators Act”, updating the insurance laws of the Territory to reflect the licensing requirements contained in the model laws of the National Association of Insurance Commissioners
- Bill No. 31-0398- An Act repealing title 33, Virgin Islands Code, chapter 12, section 525 relating to the rate of duty on articles shipped from within the U.S. Customs Zone.
- Bill No. 31-0442 -An Act amending the Virgin Islands Code Title 3, 9, and 22 to update the Insurance Laws of the Territory and to adopt the Core Standards and Model Laws and Regulations as established by the National Association of Insurance Commissioners (“NAIC”) for purposes of obtaining accreditation with the NAIC, placing the Territory on par with other United States jurisdictions and attaining greater and more effective protection for the policyholders of the Territory
All bills approved will be forwarded to the Committee on Rules and Judiciary for further
Senators present are Clifford Graham, Novelle Francis, Marvin Blyden, Myron Jackson, Sammuel Sanes, Positive Nelson, Tregenza Roach, Nereida O’Reilly and Kurt Vialet.