The Urgent Case for Mandatory Deposit Insurance in Trinidad and Tobago’s Credit Union Sector
When the Hindu Credit Union (HCU) collapsed over a decade ago, it exposed a gaping hole in consumer protection. In the wake of this disaster, the government promised to protect ordinary citizens from such devastating losses by modernizing the legal framework. Yet, the Credit Union Bill (2011), drafted to bring credit unions under the robust supervision of the Central Bank, has languished unpassed for over a decade.
Today, credit unions—which serve as a financial lifeline for many—still operate under outdated legislation that fails to address the size, risk, and complexity of their operations in today’s financial system.
A Pattern of Failures and Vulnerabilities
The HCU was not an isolated incident. Since its collapse, a pattern of governance failures, financial instability, and security breaches has continued to plague the sector, demonstrating the systemic risks that persist without stronger regulation.
Eastern Credit Union has been subject to multiple formal investigations and public scrutiny for repeated governance lapses. In 2022, an internal probe led to the dismissal of two senior managers, and independent reports have consistently noted multi-million-dollar losses and persistent delinquency issues, all of which threaten its financial stability and member confidence.
Venture Credit Union confirmed a crippling ransomware attack in July 2025, an incident described as a “cyber heist.” This breach not only disrupted services but also exposed sensitive member data, highlighting a sector-wide vulnerability to cyber threats and a dire need for centralized, professional risk management standards.
Works Credit Union has faced repeated intervention from the Commissioner for Co-operatives due to internal election disputes and court injunctions, pointing to chronic governance weaknesses that erode member trust and institutional integrity.
General Employees Co-operative Credit Union (GECCU), a former giant in the sector, was ordered to be dissolved in the 1990s after decades of poor management, signaling a history of institutional failure long before the HCU collapse. Its assets and members were transferred, but the event underscored the serious risks of under-regulated operations.
More recently, in 2023, the Airports Authority Employees Credit Union was subject to a court injunction by its own board to prevent an investigation by the Commissioner of Co-operatives into its financial affairs, indicating the continued resistance to oversight and transparency.
These examples are not mere footnotes; they are concrete evidence that the problems are deep, structural, and have been present for decades.
A Flaw in Credit Union Protection: The Problem with Voluntary Coverage
Trinidad and Tobago’s credit unions are not legally required to insure members’ savings. While a voluntary deposit insurance fund exists, participation is optional. In contrast, all commercial banks must belong to the state-run Deposit Insurance Corporation.
This uneven system leaves members of non-participating credit unions dangerously exposed, with no safety net if their institution fails. Such a gap in protection puts consumers at unacceptable risk in today’s financial system.
The Way Forward
It is time for the government to act decisively. The path to reform is clear and urgent:
Enact the Credit Union Bill to place these institutions under the prudent and consistent regulation of the Central Bank.
Mandate DIC coverage for all credit unions, ensuring that every citizen—regardless of their financial institution—receives the same basic protection.
The public should not have to wait for another collapse to make these reforms a reality. We have been taught the high cost of delay by history. The time has come to prioritize the financial security of every citizen. Stricter oversight and mandatory deposit insurance are not optional; they are a fundamental right.
References
Central Bank of Trinidad & Tobago – Credit Union Bill 2011 (Draft). (2011).
https://www.central-bank.org.tt/sites/default/files/Credit%20Union%20Bill%202011%20(Draft).pdf World Bank – Trinidad and Tobago Credit Unions: Technical Note. (2014).
https://openknowledge.worldbank.org/handle/10986/20565 Ministry of Finance – Review of the Economy 2012. (2012).
http://www.finance.gov.tt/content/review-of-the-economy-2012 Ministry of Finance – Advisory on the Offer of Relief to Depositors and Shareholders of the Hindu Credit Union (HCU) in Liquidation. (2010).
http://www.finance.gov.tt/advisory-on-the-offer-of-relief-to-depositors-and-shareholders-of-the-hindu-credit-union-hcu-in-liquidation Trinidad and Tobago Newsday – Eastern Credit Union cries foul amidst probe into its operations. (June 15, 2022).
https://newsday.co.tt/2022/06/15/eastern-credit-union-cries-foul-amidst-probe-into-its-operations Trinidad and Tobago Newsday – Two ECU managers unemployed after internal probe. (September 8, 2022).
https://newsday.co.tt/2022/09/08/two-ecu-managers-unemployed-after-internal-probe Trinidad Express Newspapers – Works Credit Union in legal battle over elections. (November 27, 2023).
https://trinidadexpress.com/news/local/works-credit-union-in-legal-battle-over-elections/article_1d120d5c-897b-11ee-8653-5750c8227e7f.html Loop News – Trinidad and Tobago’s Airports Authority Employees Credit Union facing injunction. (December 23, 2023).
https://tt.loopnews.com/content/trinidad-and-tobagos-airports-authority-employees-credit-union-facing-injunction Trinidad and Tobago Guardian – Reports on Eastern CU financial losses and delinquency rates. (2010s–2020s).
https://www.guardian.co.tt/tags/eastern-credit-union Trinidad and Tobago Newsday – Venture Credit Union confirms ransomware attack. (July 18, 2025).
https://newsday.co.tt/2025/07/18/venture-credit-union-confirms-ransomware-attack/ The Trinidad and Tobago Guardian – Kamla on report into collapse of HCU. (2013).
https://www.guardian.co.tt/news/kamla-on-report-into-collapse-of-hcu-6.2.149231.7a9c80d40c Trinidad and Tobago Newsday – The GECCU story. (2012).
https://newsday.co.tt/2012/11/04/the-geccu-story/ Afra Raymond – Blog commentary on HCU and CL Financial. (2010s–2020s).
https://afraraymond.net/tag/credit-unions
Submitted by: C.Patrick
Contact CAIR today:
.jpg)
Subscribe to our blog and contact CAIR on any of our pages:
LinkedIn: https://www.linkedin.com/company/consumer-advocacy-and-information-resource/?viewAsMember=true
No comments:
Post a Comment