FINANCIAL SERVICES UNIT DOMINICA
Impact on members:
- Reduced or zero earnings
- Live off savings
- Savings may be low and further offset by health costs
- Inability to make loan payments
Impact on credit union:
- Increased non-performing loans
- Reduced loan interest income
- Increase in loan loss provisioning
- Reduction in capital position
- Liquidity issues (Savings withdrawals) • Negative impact on growth
Regulator response:
- Credit Unions Implementation of COVID- 19 Action Plan .
- Accommodation of changes to CU’soperating hours
- Allow Board and Committee Meetings to be held virtually
- Extensions to hosting of AGM’s and filing statutory reports for a period of 6 months.
- Working with CU’s on their AML/CFT Risk Assessments
- Ongoing consultations with the League re the Covid -19 Protocols implemented by the Sector.
- Discussions on possibility of hosting virtual AGM’s
- Discussions are ongoing with respect to possibility of an interim Dividend to members
- Strategic Focus on Governance of theCU’s
International Standard-setting bodies response:
- Basel Committee: 1 Year delay in Basel III
- IASB extended exemption for applying IFRS 9 to Jan 1, 2023
Staffing Component:
- Restructuring of work programe of examiners in line with critical sector supervision
- Rotation of staff to accommodate queries and facilitate physical presence at the office.
- Review and assess COVID 19 potential impact on Credit Unions Stress test using various scenarios and assess impact on financial health and stability .
Further considerations:
- Capital Adequacy Ratio- Change risk for certain loans
- Ring fence loan losses as a result of pandemic• Forbearances:
- – Loan refinancing
- – Capital requirement
- – Loan delinquency (90 to 150 days)
