The Central Bank of Belize has taken over the second-largest Credit Union in the Country, the St Francis Xavier Credit Union - which is based in the north.
This rare and almost unprecedented move to stabilize the credit union and ensure its survival was announced late this afternoon in a press conference held at the Central Bank - the very first press conference held by the Bank's senior leadership literally in decades.
And that shows how important and big a move this is - after all, St. Francis - which has 30,000 members is the most powerful lending and savings entity in the north. But, according to its regular, which is the Central Bank, SFXCU's board and management was not acting in its members best interests - so they swooped in.
Today the Bank's Governor who is also the Registrar for Credit Unions detailed the actions he has taken:
Kareem Michael, Governor, Central Bank
"In my capacity as register of Credit Unions I would like to inform the Belizean public that I have appointed an. Administrator to Saint Francis Xavier Credit Union Ltd. pursuant to section 6113 of the credit Union act. I did so having made the determination based on the facts available to me that this step was required to protect the interest of the members, the true owners and depositors of Saint Francis Xavier Credit Union."
"On the 5th of July 2022, I also placed the Credit Union under a regime of enhanced supervision by appointing on site examiners to review the day to day operations of the Credit Union pursuant to section 60 of the Credit Union act. The information gathered as a result of the said special examination and the examiners I appointed uncovered what I regard as critical deficiencies in governance and risk management practices."
"The key issues which were identified, the board continues to disregard it's fiduciary responsibilities under the credit union act to provide strategic direction, ensure that risk are properly managed and establish sound corporate values and conduct, thereby compromising the safety and soundness of the credit union."
"The board's non-committal responsive to address the grave issues uncovered during onsite examinations are strong indicators that the board is not equip or disposed to discharged its fiduciary responsibilities to members and depositors of the credit union. The culture of unaccountability at the management level continues to result in subjective decision making and self-dealing practices while discounting the risk and potential losses to the credit union. The committees are ineffective in their roles of managing credit and in providing un-bias objective review of St. Francis Xavier Credit Union risk management governance and internal controls processes."
"For these reasons I have concluded that the appointment of an administrator is required to protect the equities and the interest of the members/owners of St. Francis Xavier Credit Union."
The administrator is career banker Martin Marshalleck assisted by several individuals also appointed by the Governor of the Central Bank as well as employees of the Central bank.
