Credit unions in Cuba could be successful, but only if they follow cooperative principles and are established for the good of the Cuban people, participants of a National Cooperative Business Association/Cooperative League of the United States of America press conference said earlier this month.
"We believe that as Cuba evolves, the seven cooperative principles will become part of the DNA of much of Cuba's economy," Mike Beall, president/CEO of the NCBA/CLUSA said during the March 10 event in Wash., D.C. "And this will be good for the American consumer."
The NCBA/CLUSA press conference, held at the National Press Club during the GAC, introduced the organization's U.S.-Cuba Cooperative Working Group, designed to find ways to help Cuba establish and enhance its cooperative business. However, financial cooperatives such as credit unions, Beall said, may be among the most difficult ones to launch.
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"My sense is that the financial segment has seen the least evolution by the government to loosen up on its controls," Beall, former president/CEO of both the Missouri Credit Union Association and Maryland/D.C. Credit Union Association, said during a subsequent interview. "For U.S. credit unions, the OFAC regulations are stringent and come with lots of civil money penalties. Removing Cuba from the terrorism watch list will be central for connections between the U.S. and Cuban financial institutions."
In July 2014, Beall led an NCBA/CLUSA research group to Cuba specifically to look at agricultural co-ops, the most mature of any of the country's emerging cooperative businesses. A second visit, which the organization is planning for August 2015, will likely include credit union representation, Beall said.
Credit unions may be the economic half-step Cuba needs in its evolution from a communist country moving closer to free-market enterprise, according to Patrick La Pine, president/CEO of The League of Southeastern Credit Unions and a participant in one of NCBA/CLUSA press conference panels. Given the establishment of the right type of governance, credit unions can provide Cuba with a more acceptable, if not more familiar approach to financial services, he added.
"I don't see Cuba rolling out the red carpet for Citibank, Chase or Bank of America," La Pine said. "Cuba understands the cooperative model, although they might wonder what's in it for us. We're trying to do this because we have a track record for establishing credit unions around the world."
La Pine and others have cited credit unions' rapid emergence and market dominance in post-communist Poland as an example of how quickly credit unions can capture the interest and allegiance of a public wearied by a totalitarian regime. Although it's evolving, Castro's communist regime is still in place, but the country offers advantages in spite of its challenges, he explained.
"We have a number of Cuban American credit unions already operating in the U.S., so there will be few cultural gaps to overcome," La Pine said. "I think if you look at what we've done in countries such as Poland, there are good examples of credit unions making a difference."
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