On 27 November, during the 2019 Annual General Meeting, members had the opportunity to submit questions live during the event via a Q&A feature on Slido.com. We answered as many of these as possible at the AGM, however, we didn't get to all of them, so we've compiled these questions and provide the answers below. Although these questions are from the AGM, they also represent the most common questions Credit Union members frequently ask via email, telephone or when they visit the branch. Members are always welcome to contact us to request clarification or ask more questions at any time.
Q: Can a member opt not to have permanent shares, or will permanent shares replace regular shares as criteria for membership?
The Credit Union Rules require all members to have $25 in permanent shares and at least $25 in voluntary shares. Permanent shares will not replace voluntary shares.
Q: Can permanent shares become DORMANT?
No. Permanent shares cannot become dormant as the amount required is $25 and no activity is expected on the account while you are a member of the Credit Union. However, your voluntary share account will become dormant after 12 months of continuous inactivity, i.e., no transactions. Our Credit Union encourages you to save monthly to avoid your voluntary share and savings accounts from becoming dormant.
Q: What if any difference in member voting rights as they pertain to permanent shares versus voluntary shares?
Your voting rights do not change! Each member has one vote regardless of the number of shares held, be they voluntary or permanent. Permanent shares provide each member with equity and ownership in our Credit Union, but do not affect voting rights.
Q: What determines the limit on the number of permanent shares a person may acquire. Is there a minimum and/or maximum?
The Rules currently require $25 in permanent (ownership) shares for each member. The current Rules do not include a ceiling limit and therefore a $25 dollar deposit is the only requirement for permanent shares.
Q: Please clarify if permanent shares will only go forward if we vote yes today? If we vote no, then it will not move forward? Is this so?
The Rules were amended to include permanent shares by members at the 2012 AGM.
Q: Why are ALL members REQUIRED to have permanent shares?
The Credit Union Rules require that all members to have $25 in permanent shares and $25 in voluntary shares to join the Credit Union.
Q: Will members eventually have the option to make transfers from their permanent shares account except for the $25 minimum?
Your permanent share account will only require $25 in deposits; therefore, no transfers are allowed in accordance with the Credit Union Rules.
Q: Would the Credit Union consider investing permanent shares in a project or investment fund that will pay dividends to members?
Our Credit Union primarily invests money received from members’ loans payments, and excess cash is held in fixed deposits with banks. However, our Credit Union may also invest in the following as approved by members in the 2018 Annual General Meeting:
LOANS AND THE LOAN PROCESS
Q: If a property owner over the age of 60 applies for a mortgage together with a younger family member, why does the Credit Union calculate the monthly payment based on the older person’s age as this means a higher payment?
The Credit Policy of the Credit Union states, “Members 65 years and older are not eligible for out-of-shares loans, except where the ability to repay is determined and life insurance is assigned.” This means that the primary loan consideration for someone over age 65 is on the ability to repay the loan. Income such as rental income and pension are included in this determination. If a joint application is made with a younger applicant and an applicant 60 years of age or older, the younger applicant’s age may be used if their income level is enough to pay the loan.
Q: If you have a loan and your collateral is more than your loan, why can't you withdraw from your shares? Your share should be held as collateral also.
If you pledged shares as part of the collateral when you were granted the loan, those shares will be held until the loan is repaid. If you continue to save while your loan balance declines, you may request a withdrawal of the excess shares saved.
Q: Will the Credit Union allow people that work in the hotel industry to apply for loans and use their gratuity as income to be considered for loan repayment?
Our Credit Union reviews its Credit Policy annually. This is an area that we will include in our next review to determine if gratuity in whole, or in part, may be eligible for inclusion in total income when assessing debt service ratio.
Q: Is it possible reduce the time a member must wait to get an appointment with a loans officer?
We plan to re-vamp our loan appointment system in the first quarter of 2020 so that we may improve efficiency to accommodate the growth of the Credit Union over the last two years.
Q: Will the Credit Union consider reintroducing the 100% loan financing, especially to purchase or build a house?
Annually, our Credit Union reviews is liquidity and assesses what special promotions will be available to our members. The 100% financing for first-time homeowners is not an annual promotion. This promotion was held in 2018-2019. However, we will ensure that members have adequate notice of all future promotions through social media, emails and our website.
Q: Why can’t the ATM be serviced/replenished outside of peak daytime hours? (This is a paraphrase of four similar questions.)
Our Credit Union only has one ATM currently, which is in high demand. We replenish the cash daily (Monday thru Friday), and this is done during opening hours of the branch so that members may complete their transaction inside the branch while the ATM is being replenished.
Q: Why is isn’t it possible to do share account transactions at the ATM instead of over the counter?
We encourage saving at our Credit Union. Your share account should be used to accumulated savings in order to maximize the return from dividends. You may use your savings account for withdrawals at the ATM.
Q: Would the Credit Union consider placing another ATM elsewhere besides at the Credit Union building? Perhaps one inside the government administration building?
Our Credit Union will begin the process to implement a new banking system in 2020. It is estimated that the implementation will take at least 18 months to complete. This new system will enable us to have more ATM’s and the first two additional ATM’s will be placed in the government administration building and in Savannah.
Q: Does the Credit Union offer basic money management classes to encourage better savings and budgeting?
Our Credit Union will commence offering basic money management classes/workshops to members from the second quarter of 2020. We will advise members by email and through flyers located at the branches. Currently, members may receive one-on-one financial advice by appointment.
Q: I applaud the Credit Union for improving loan products and increasing loans. What is also being done to encourage members to become savers?
All members are encouraged to save at our Credit Union. We offer a preferred interest rate on savings accounts of .50% which is significantly above the market for all banks. We also offer preferred rates on fixed/term deposits. Please see our fixed deposit rates here.
In addition, all members who borrow from us are encouraged to save by increasing their monthly loan deduction to include an additional savings amount to be placed in their shares account. The true value of the using the Credit Union is that borrowers can save while paying down loans. These savings will accumulate considerably by the time the loan is repaid. As the member’s shares accumulate, dividends increase.
Q: Is the Credit Union going to implement an online banking app on which we can check our balances and do transfers on any smart phone? Will the new system upgrade enable us to make loan payments online from our savings account?
When the new banking system is implemented, members will be able to download a mobile app on their smart phones, check account balances, and pay loans from their savings account.
KEY PERFORMANCE INDICATORS
Q: How is the delinquency rate calculated? And did the absolute figure of delinquent loans decline or is the rate lower because of other factors?
The delinquency ratio is calculated by dividing the total non-performing loans past due more than 15 days by the gross loan portfolio. Total delinquent loan balances declined by 16% over the previous year.
Q: What are the interest rates paid on fixed deposits, and what are the minimum terms and amounts? Please advertise your rates online.
Please see our fixed/term deposit rates here.
Q: Which charities received funds and how much each?
Please see page 26 of the 2019 annual report here, and on page 14 of the Friday, 13 December 2019 edition of the Cayman Compass. A total of $14k KYD was donated during the 2018-2019 financial year.
Q: If a company issues me a cheque. Can I deposit it in my account?
Yes, you may deposit the cheque and if the amount is outside your account profile, you will be required to complete a source of funds form for regulatory purposes.
Q: Could the dividend be paid on a sliding scale?
Our Credit Union endeavours to treat all members equally. Dividends are declared at a rate that is payable after the deduction of the statutory reserves, and once approved, are equitably applied to all member share accounts regardless of the number of shares held by each member. Members with higher share balances will receive more dividends and thus we encourage all members to save. If we pay members with higher shares a lower dividend rate, this will discourage saving and limit funds available to lend. This then reduces the amount of income earned to pay dividends.
Q: Will the Credit Union offer other investment options besides just share accounts?
We currently offer savings, fixed deposits and share accounts which attract earnings for our members. We will explore other options for discussion with members at the 2020 AGM.
Q: Could the Credit Union consider implementing a death insurance product like those available in other parts of the Caribbean?
The Credit Union currently offers a benefit to beneficiaries of members upon their death. In other parts of the Caribbean, members pay a fee for this benefit, however, our Credit Union provides this free of charge as it is a discretionary benefit approved by the Board of Directors. Members’ beneficiaries may receive up to CI$16.4k on shares and $32.4k may be applied to loans outstanding. (Terms and conditions apply.)
Q: Would the Credit Union consider offering revolving line of credit loans?
The Credit Union currently offers an unsecured loan facility called the Xpress Overdraft which is a form of a revolving credit line. The Xpress Overdraft allows the member access to financing with a predetermined limit and manageable repayment terms. The level of availability between the credit limit and the current balance may be accessed, or “topped up”, to the original credit limit, and again repaid. The revolving credit product may be used for any purpose.
Q: The question about the offering members the ability to open of USD accounts was raised at the last AGM. How is this coming along?
We will work to enable offering more than one currency when we implement the new software.
Q: Why is the Credit Union held to the same standard as class A banks?
The Credit Union is a deposit-taking and lending institution which is subject to some of the same risks as Class A banks and therefore, is included in the regulations covering Anti Money Laundering and Counter Financing of Terrorism. Even though we may not be deemed as risky by the evaluators, our Credit Union must comply with the guidance, regulations and laws relating to financial institutions that hold and deposit funds.
Q: Does the Credit Union have any plans to offer Visa debits card any time soon?
We will also explore this product once we implement the new software and determine the financial feasibility of offering such a product. Whereas, our Credit Union wants to provide efficient use of financial services, our primary goal is to promote saving and thrift.