The pandemic is "too good a crisis to waste," Lambert Johnson, first vice president of the Jamaica Co-operative Credit Union League, said. "It presents us all with opportunities to deal with our business with not business as usual, but business unusual," he said.

Lambert Johnson

Credit unions can help stabilize the region through their role as employers and by continuing to provide affordable access to insurance and financial services, which is in line with sustainable development goals, according to Andre Vincent Henry, director of the Cipriani College of Labor and Cooperative Studies. He encouraged conference participants to contemplate "a very dynamic role for the credit union movement, not only in the COVID crisis but in the post-COVID new normal." Besides helping to build "a new entrepreneurial class of small and micro-enterprises," credit unions should work toward influencing public policy issues that impact members, Henry said.

Andre Henry

"We need to move away from just thinking in terms of policy that affects the movement per se and to do a big new think and to construct a big new agenda for the credit union movement, which will include input in important policy areas that, while it will not affect directly individual credit unions or even the credit union movement, would impact the core membership or the core group of people that a credit union addresses," Henry said.

Speaking to 250 webinar participants, CCCU Board President Winston Fletcher called credit unions "vehicles for social and economic transformation. We do that through the financial inclusiveness we provide. We provide access to financial products to those who are considered underserved, underbanked, unbanked – we are taking care of the small man," he said.

Fletcher said the COVID-19 pandemic presents a "seismic disruption to our social and economic life" as he announced the league's donation of $115,000 toward the purchase of personal protective equipment for credit union staff across the Caribbean, as well as doctors, nurses and other frontline workers. "We hope that it will make a difference in the lives of our members and the broader society," Fletcher, who is also president of the Jamaica Co-operative Credit Union League, added.

On Trinidad and Tobago, the government is stepping in to help with funds that credit unions can tap into for member relief. The program includes a $100 million liquidity support program for credit unions to provide to its members, according to Joseph Remy, president of the Co-operative Credit Union League of Trinidad & Tobago.

And on Barbados, the Barbados Co-operative & Credit Union League is in the process of setting up criteria to respond to the most vulnerable credit union members with cash or in-kind grants.

Winston Fletcher

"As you are aware, credit unions were born out of difficult times. And now more than ever, we have to ensure that the most vulnerable in our society are afforded the opportunity to live and provide livelihoods for themselves and their children," Hally Haynes, president of the Barbados League, said.

The pandemic has caused cruise lines and air travel to grind to a halt in a region heavily dependent on tourism, according to the International Monetary Fund. The sharp slowdown in economic activity is projected to cause the deepest recession the region has seen in more than half a century, the IMF said.

But tourism is not the only economic indicator devastated by COVID-19. Commodity exporters such as Guyana, Suriname, and Trinidad and Tobago are suffering from a steep drop in prices, according to the IMF.

Remittances from expatriates, which average about 7% of the Caribbean region's output and exceed 15% of GDP in Haiti and Jamaica, are expected to fall sharply with the U.S., Canada and the United Kingdom in deep recession, the IMF said.

In addition, citizenship-by-investment programs, an important revenue source for several Caribbean countries, may decline sharply if investors lose confidence in the quality of health care in those countries, putting further strain on finances, the IMF said.

Henry, of Cipriani College, said the number of people living below the poverty level in the Caribbean would increase as a result of COVID-19.

"A lot of workers in the Caribbean are working one paycheck away from poverty. Besides persons living below the poverty line, there are large numbers of persons who, while not yet categorized as poor, are vulnerable to poverty," Henry said.

Citing the example of Grenada, where he said 2% of the population lives in extreme poverty, another 38% was living in poverty and 15% was vulnerable to poverty. Henry said, "What you really have is 50% of the population in a country in the Caribbean who are in extreme poverty, living in poverty or vulnerable to poverty. My question is, with the dislocation of the pandemic, what will the effect on these population groups be?"

The challenges of the current environment are particularly acute for smaller credit unions, Haynes noted. In Barbados, there are 32 credit unions, but a handful of large institutions have captured most of the market, he said. Smaller credit unions have a limited management capacity for complying with international reporting standards and meeting more robust and evolving regulatory standards, as well as limited product offerings to attract new members and put more money in the pocketbooks of existing members, Haynes said.

The Barbados League has launched a shared services initiative to help smaller credit unions comply with internal audit and compliance requirements, with a focus on money laundering and counterterrorism standards, Haynes said. But implementing services such as credit and debit cards, online and mobile banking remains a challenge, he said.

The pandemic has given new urgency to efforts by the region's credit unions to seek relief from certain regulations.

Johnson said the Jamaican League has sought permission from regulators to allow credit unions to forgo payment of an annual dividend this year, and to reduce the nation's liquid assets ratio from 20% to 17%, a move that will free up a significant amount of cash for other purposes.

Remy said the Trinidad & Tobago League is seeking regulatory changes that would allow it to process utility bills and loosen restrictions on the types of investments member institutions can participate in. His group also seeks to change a regulation requiring government approval of individual applications for mortgages.

In light of the pandemic, credit unions in the region are seeking relief through a new series of rules known as International Financial Reporting Standard 9 from the International Accounting Standards Board, Andrew Price, vice president of advocacy for the World Council of Credit Unions, said.

Among other things, IFRS 9 governs accounting for losses caused by government moratoriums on loan payments because of the pandemic, which is of concern to the credit unions, Price said.

The Caribbean credit unions are also seeking flexibility to tap into buffer accounts to assist with the current challenges they face. And credit unions in many Caribbean nations have been seeking permission to hold annual meetings virtually because of health risks related to large gatherings, Price said.

WOCCU and the CCCU have been helping members in the region make the case for relaxing regulations.

Financial regulators in the Caribbean are often strict because of the region's historic reputation as a center for money laundering, Price said. In addition, financial regulators in the region sometimes fail to consider relative size and complexity when they impose the same regulations on international institutions like Deutsche Bank as local credit unions, Price said. Some other nations' regulators have been more willing to postpone implementation of such rules in light of COVID-19, he said.

"It's fair to say the response in the Caribbean has been slower than in the U.S., Canada and Australia, but I think they are listening. They are coming around," Price said.