At the top of the news, you heard Central Bank Governor Kareem Michael discuss the implications of removing the face of the late Queen Elizabeth from Belize's currency notes.
Well, during that extended conversation, the topic of the Central Bank's continued surveillance of the Saint Francis Xavier Credit Union came up.
Two months ago, a leaked letter emerged from Belize Credit Union League, which noted that the Corozal-based credit union was being placed under "enhanced surveillance."
That letter said, quote, "...The credit union was also informed of the appointment of an independent auditor to look into deficiencies highlighted in an audit report that was shared at the SFXCU 2022 AGM." End quote.
So, what does "enhanced surveillance" mean, and why is the Central Bank keeping such a close eye on SFXCU? The Governor briefly discussed that matter today:
Kareem Michael - Central Bank Governor
"The Central Bank is keeping a close watch on St. Francis. They are still under enhanced supervision, and we're considering other remedial actions. Last week, we issued a series of follow-up actions or corrective actions that the board of St. Francis must execute within a certain timeframe, and we have also commenced another on-site examination of St. Francis. That's where we are right now."
Reporter
"For a credit union of that magnitude to be placed under revised supervision suggests that there is something that's worrisome at the institution. Without giving away too much of the details, what's worrying the Central Bank at St. Francis at this time? You can speak generally on it."
Kareem Michael
"So, it's - we term it enhanced supervision, and in our general oversight and surveillance of credit unions, we assess different aspects of what a licensee should have, the minimum standards across - let's say - loans, governance, AML CFT, the audit function - and we make a determination whether or not there are weaknesses that exist. We also take a look at finances. Now, one has - neither of these things can be looked at in isolation - or should be looked at together. The Central Bank holds the discretion, depending on the degree of these weaknesses, to decide whether or not an institution can deal - or should be, with the Central Bank's help, a little bit of hand-holding. And that's what we're doing. Now, what triggered this, of course, is what you saw in the run-up to the AGM 2 months prior. And it is something that has been sort of a part of the history of St. Francis, which has repeated itself. So, we were obviously concerned that - they say, one strike, two strikes, three strikes, you might be out. This repeated pattern could actually be to the detriment of the customers, depositors, and members of the credit union itself. So, we wanted to ensure that we do a bit of handholding to shore up these core areas of the credit union. And that's what we're doing."
As viewers will remember, this credit union went through a lot of internal turmoil until the General Manager, Rafael Dominguez, was returned to his post after an AGM, which was held at the end of June.
